In a biblical sense, the "Gospel" means "Good News." So, the Gospel writers Mark, Matthew, Luke, and John were "dispensing" the Good News of the "Coming of Jesus." Yes, in a perverted sense, the "Coming of Google" has been great for the world wide web, literally transforming all our lives and connecting us all globally into a 'small community."
But, the good news that I have to dispense is for Google investor, not for world wide web community of internet users. As we all know, in recent months, Google has suffered some huge losses, declining 43% to 425. Turns out the reason for that hit is their ad revenues were not recession proof. Apparently, web surfers are suddenly not clicking on their ads as frequently as they once had.
Anniversary Kisses and Round Trippers
That 43% decline caused Google to take out their 2007 Year Low at 437 set on March 5 2007. I can't help but marvel after all the years I have been doing technical analysis, how frequently markets "round trip" to important anchors at the juncture of important anniversary dates. I call these round trips at anniversary dates "Anniversary Kisses." On its one year anniversary in March 2008, Google' stock price has 'kissed" its previous year's lows at 437.
Market Anchors
Longtime readers of mine that read my blog posts on " Key Market Structures" back in 2H 07 know I am a huge fan of market anchors. Yearly highs and lows are indeed important anchors. They tend to act as "sticky points."
I expect that last year's lows at 437 will prove to be an important "market anchor" for Google in 2008. There is still alot of heat on Google's stock price, and a lot of bearish momentum yet to burn off, and they still have to get their revenue models growing again at a rate that can sustain a higher stock price, but in the meantime, while things get sorted out, investors will use the 2007 year lows at 437 as a sticky point.
In fact, Google's stock price is already behaving favorably around the 2007 year lows. Just this week, on Monday March 24, Google's stock gapped open higher from the previous weeks close at 433 to 437 ~ last year's lows. Now, bull gaps are extremely important, and even more so when they back gap above a yearly low. Traders and investors who trade with a technical bias will use last years lows and this bull gap low both at 437 as an anchor to identify low risk entries on the long side. Yes, the trend has shifted to a bearish bias for the near to interemediate term in a few short months, but that could change almost as quickly as the bear market that has just been ushered in. Identifying counter trend long trade entry strategies near 437 in 2008 may prove to be both low risk and profitable in the long run ~assuming Google's still capable of being considered a growth company.
And that is the Good News, or the Gospel according to this John, not the biblical one. Word has it, the biblical John is a higher authority than me ~ much to my chagrin!
Did you like this article?
Submitted By 
's
