Is Google Oversold?

Google (GOOG) has come down quite a bit.  It’s down from 700 in the last 12 months.  It’s definitely one of the oversold candidates.  MACD is still pointing down. RSI is close to oversold.  It could be forming an inverse head and shoulders pattern and due for a bounce that could take it up to the 400 level or so.  I’ve always liked Google and their ability to innovate.  They’ve destroyed the newspaper business and they are a true cash cow.  I guess one of the main questions is: Will a protracted consumer recession impact their free cash flow?

At this level, it bears watching.  It could easily pop 100 pts or so on a strong rally.  I expect volatility to be crazy during this holiday week, and  I expect hedge funds will push the market all over the place.  I’m planning to be very cautious trading this week, especially on Tuesday afternoon and Wednesday.

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