Google Wants to Follow You Around the Mall

NEW YORK (TheStreet) -- Innovation has been the name of the game for Google (GOOGL) and a report in the Wall Street Journal shows how the Internet services giant is trying to help brick-and-mortar stores at the mall interact with on-line searches and purchases.

Google wants to use technological enhancements in on-line advertising to analyze your shopping experiences on the Web to extend your product purchases at the mall.

The question today is whether or not this development can help Google shares recover from its popping of its price bubble? On March 28 in, Pop! Goes the Momentum Bubble I warned that the momentum bubble was starting to pop. Goggle was one of eight stocks profiled in this post.

The daily chart for Google ($537.76 at Friday's close) shows that the stock set its split-adjusted all-time intraday high at $615.04 on Feb. 26 with stock below its 21-day and 50-day simple moving averages now at $568.78 and $585.87 since March 24 and is above its 200-day SMA at $513.10, which is the short-term 'reversion to the mean'.

Notice that the stock has been above its 200-day SMA since July 24, 2012 and this moving average provided a buying opportunity at $320 on Nov. 16, 2012. The stock nearly tested its 200-day SMA on Oct. 9, 2013.

Courtesy of MetaStock Xenith


The weekly chart for Amazon is negative with the stock below its five-week modified moving average at $568.58. Note that the stock crossed its 200-week SMA in four periods since 2008: September 2008, August 2009, May  2010 into September 2010, and June 2011 into October 2011, then came the parabolic move to the all-time high that popped in early March this year. The 200-week is currently at $356.31, which is a big drop to this longer-term reversion to the mean.

Courtesy of MetaStock Xenith

Investors should consider entering a GTC (good until cancelled) limit order to buy weakness to an annual value level at $522.17 vs. the year-to-date low at $530.53 set on April 7. This week's value level is $536.08 with upside to a quarterly risky level at $562.40, which began April as a pivot. A lower value level is at $489.53.

Investors can use today's analysis as a pre-earnings profile for Google as the company is scheduled to report quarterly results after the closing bell on Wednesday. Analysts' expect the company to report earnings per share at $5.37.

At the time of publication the author held no positions in any of the stocks mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff

Richard Suttmeier is the chief market strategist at ValuEngine.com.

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