Weekly Stock Pick

My scan of the charts this week came up with a company most everyone on the internet knows about. I’ve been looking to get back in the stock since I got in the IPO back in 2004, then sold in mid January of this year when the entire market was going down hard and heavy. My basis for my position on this stock is purely technical. The fundamentals over the years have spoken for themselves.

Buy Long on Google, Ticker GOOG

Friday July 11 GOOG Prices: Open 536.50, High 539.50, Low 519.43, Close 533.80.

Google Earnings Call: Q2 2008 Earnings July 17, 2008 1:30 PM PT / 4:30 PM ET. In the past Google have generally had the best reports and price reactions after their earnings announcements.

Current Technical Analysis on Google

The Google chart has created major Elliott Waves 1 & 2 from its recent uptrend of its 413.04 yearly low price on March 10th. Wave 1 completed on May 2nd at a price of 602.45, and Wave 2 completed on June 27th at a price of 515.09. The completion of this major Wave 2 could be signaling a continued uptrend into Wave 3.

Just to review Elliott Wave, Wave 3 is normally the biggest and longest of the 5 waves, with waves 2 and 4 being the corrective downward waves in an uptrend, and vice versa in a downtrend.

In the intermediate term, GOOG has almost completed a 5th wave corrective downtrend between the major up wave 1, and major down wave 2, which started on June 30th at 589.92, which I expect to be completed any day now, signaling a possible return to uptrend.

In the short term, GOOG has formed minor Waves 1 & 2 signaling a possible return to uptrend, with the bottom of Wave 1 June 27th at a low of 515.09, and the top of Wave 1 July 9th at a high of 555.68. Wave 2 now sitting on last Friday July 11 low of 519.43.

GOOG July 11 price has just hit below the recent up gap price on April 18th, which looks like a healthy sign of shaking out the last weak hands on Google.

An upward triangle is forming signaling a possible breakout to the upside. Starting from March 17th to July 11th for the lower trendline, and May 5th to June 5th or June 17th for the upper trendline forming the triangle.

On a long term basis the money flow index is reading very low at 33.85 during the week of July 11th, coming from 24.73 during the week of June 30th.

With the long, intermediate, and short term, signaling a return to possible uptrend, I see Google as a very low risk high reward entry position currently to get in on the worlds leading internet company and stock play.

Google Buy Long Trade Setup

Buy Entry: At current prices and or where I project the Intermediate Wave 5 ending at about 512.89. This would take any stops sitting just below the recent June 27 low of 515.09, if it happens.

Stop-Loss: 488.52 to 485.44 which is about 8%. Or if you can handle losing more set your stop lower.

Google Take profit regions.

Short Term: 547.70

Intermediate Term: 602.45

Long Term: 702.49

Longer Term: Leave Open

Google at Sun Valley Last Week

Google spoke with reporters about many things the Sun Valley Conference. The list of key issues being addressed were the Yahoo deal, Viacom’s lawsuit against Google, politics, energy, and the environment.

What I paid most attention to was the positive view of CEO Eric Schmidt about energy prices, consumer confidence, and the financial markets. Schmidt thinks that USA’s creativity will work things out. I tend to agree, but more on a global basis than just a USA only basis I contend. Schmidt cites an example of the people working at Google, saying they're "inventing the future."

In my mind this is the key point of the whole news conference they held there. The future has yet to be. We the people of this earth hold the power to create it. Leaders are people who take the first step by saying “what if”. People like co-founders Larry Page and Sergey Brin have already lead the way, and still continue to lead the way. These guys are true visionaries, and the visions of leading people create grand things for all people in many different ways. In my mind, these guys put the power of the world largest network, the internet, back in the common people’s hands, and out of the sole control of the Fortune 500 players wanting to control it all as usual by using Yahoo to advertise it all through. This is evident in the fall of Yahoo and their previous advertising only revenues from the big players, and the rise of Google, and their power to the people with social networking, and myriad of products for everyday people using the internet.

Schmidt mentioned that about two billion people around the world are now moving into the middle class. Yes, the rest of the world has been, and continues to grow like the USA and western world did in decades past. And growing bigger and faster than the developed world did in the last 50 years. With billions of people around the world now entering the middle class, just compare that with the mere millions that were entering the middle class 50 years ago, and now this is a recipe for huge global growth, namely with India, China, the entire Asia region, and parts of South America like Brazil too. Hopefully pretty soon, Africa can start enjoying the new global growth that’s been ongoing also. They deserve it.

Schmidt says that "the sun will rise tomorrow" and to remember that it's a positive world. Yes I agree. Over the long term, good as always prevailed over evil. Schmidt, Page and Brin were also excited about the education panel they listened to the previous morning, and interested with the idea that the same amount of money can be spent on education much more efficiently.

Google Company Profile

Google Inc. maintains an index of Websites and other online content, and makes this information freely available to anyone with an Internet connection. The Company’s automated search technology helps people obtain nearly instant access to relevant information from its online index. Google generates revenue primarily by delivering online advertising. Businesses use its AdWords program to promote their products and services with targeted advertising. In addition, the thousands of third-party Websites that comprise the Google Network use its AdSense program to deliver relevant ads that generate revenue and enhance the user experience. In September 2007, Google completed the acquisition of Postini, Inc., a provider of information security and compliance solutions. In March 2008, the Company completed the acquisition of DoubleClick, which offers online advertisement serving and management technology to advertisers, Web publishers and advertisement agencies.

Click here to review and Trial the Trading Software I used in determining my buy long position on GOOG.

Good day, good investing and trading!