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The Selling Pressure Continues into a Test of Critical Support


Below is what we discussed yesterday morning, when Google Inc. (GOOG) was trading at 710.

Today it has followed our technical script, and traded lower to 687-686 as it approaches a full-fledged test of its July support line at 686, and its prior significant pivot low at 673.25, which must contain the weakness to avert further weakness that tests the rising 200-Day EMA, now at 662.22.

Right now, I am looking for a test of the 200-Day EMA. MJP 2/5/16

GOOG rocketed in reaction to its 2/01 earnings beat, which spiked the stock to an all-time high at 823.74. That is the good news. The bad (technical) news is that the new high was not confirmed by my intermediate term Momentum gauges, with the price structure above GOOG's June 2012 upper channel boundary line at 772. The combination is (was) a prescription for a powerful downside reversal into a correction. Although GOOG has reversed sharply beneath the upper channel boundary, it remains vulnerable to pressing lower to probe key support between 680 and its 1/20 low at 673.26, which must contain the weakness to avert a full-fledged test of its rising 200 Day EMA, now at 662.01. MJP 2/04/16

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