Google hit with third lawsuit! Buy dip at trend line support?
Shares in Google’s parent company Alphabet have been in full focus as they received a third government antitrust lawsuit in less than two months. Thirty eight states in the United States have joined forces to claim Google maintained a monopoly in general search and search advertising illegally through anti-competitive contracts.
The move is likely to influence investors buying when the stock price is at record highs. In fact, the technical chart looks relatively bullish as the price struggles to break through the 1.272 Fibonacci extension level taken from the 2 September swing high to 23 September swing low, as shown below:
Source: Admiral Markets MetaTrader 5, #GOOG, Daily - Data range: from Jul 16, 2020, to Dec 17, 2020, performed on Dec 17, 2020, at 9:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
Last five-year performance: 2019 = +28.18%, 2018 = -0.80%, 2017 = +32.93%, 2016 = +1.86%, 2015 = +46.61%.
Fibonacci extension levels are used to help identify potential turning points in the market. At the level highlighted above, the price has also failed to make a higher and has formed a double top fake out chart pattern around the 1,810.17 level.
The price may pull back towards the ascending trend line support level as highlighted by the thick blue line, after all, many investors may think twice about buying a company trading at record highs with three antitrust lawsuits to deal with.
If the price can pull back towards the trend line support it may be an area investors may consider to turn up once more.
According to BarChart, bullish ratings from analysts have peaked:
Source: BarChart, December 17, 2020
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