Google is making a very nice and sharp recovery, and it’s clearly pushing to the upside with price trading at new highs. However, keep in mind that this could be wave five of the move, which means we may be in the late stages of a higher degree bullish impulse.
Typically, wave five tends to reach the upper boundary of the impulsive channel, which in this case comes in around the 380 area. So after any short-term pullback, there is still room for more strength, temporary.
Support on dips is seen around 331, but there is also a deeper support zone between 320 and 306, which leaves plenty of room for a near-term retracement.
So overall, while the trend is still bullish, risk-reward is not very attractive at current levels, especially ahead of earnings this week.
Highlights
. Price at new highs, but structure suggests wave five, late stage of the move
. Resistance zone around 380, upper channel line
. Support levels at 331, then deeper at 320–306
. Risk of short-term pullback before any further upside
. Not attractive risk-reward at current levels, especially ahead of earnings
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