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Price: At this time, GOOG has been cruising up for 10 months or so, and this is only the second time the price is dipping below the 50MA. An amazing run up, even for such a strong stock as GOOG! The 50MA is still going up strong, but the 10MA and 20MA rolled over and are now in a solid downtrend, the 10MA even going below the 20MA. Not a bullish sign, but not a deadly sign either. Price seems to hold at the 50MA. Notice the large separation between 50MA and the most recent price top. Such a large separation is not healthy, it basically means the price needs to come down again to levels closer to the 50MA, which it just did in a strong swing down. Volume: Volume is a disaster. It has been much higher than average for the last weeks, exactly while the price was dipping to the 50MA. This sets off loud alarms! High volume while price is going down is a very bearish signal, especially in quantities like this. See it as the smart people moving out of the stock en masse. Stochastics: Stochastics is lagging in oversold territory, not able to move up, indicating selling pressure. ADX, +DI and -DI: After many months of +DI dominance, -DI is fighting back with a nice scissor action and a series of higher pivot highs. -DI is not strong enough to challenge the last pivot high of +DI, but there is nice separation between -DI and +DI, making the +DI look a bit weak. ADX is still very strong above 25, meaning in theory the uptrend is still happening. MACD: MACD is all the way below the zero line, making a deep low, much lower than its previous low. It will be very hard for MACD to make a new high above zero. MACD looks pretty bearish right now. Conclusion: There is not much positive news, ADX is still strong confirming the uptrend, +DI has not broken down completely, and price is balancing on the 50MA, but otherwise there are plenty of negative signs. Volume especially is very worrysome. If you're still in the stock, now is a good time to bail. It's a bit early for a short, it would be better to wait for the price to make the next high. Below is the stock 6 months later. Try to find the January 19, 2010 date where the chart above left off. GOOG indeed fell off the cliff, not even bothering with a bounce off the 50MA but instead sinking right through it. Since GOOG is such a strong stock, it did try to hold on for another few months before totally collapsing in April 2010. Notice the two blow-out peaks on high volume, one in March and one in April 2010. All signs of impending doom which finally came end of April 2010. As soon as GOOG recovers, it's time to jump back in for another ride up!  Chart by
www.FreeStockCharts.com
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