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Thread: GOOG - massive compound inverted H&S pattern?

  1. Default GOOG - massive compound inverted H&S pattern?

    Does this look like a nearly 14 month compound inverted head & shoulders pattern at the 630-645 level to anybody else?

    Tech has never been my thing so please feel free to weigh in with fundamentals/macro perspective both pros and cons.

    I've been giving serious consideration to taking down a few shares of GOOG the last week or two but have been waiting for year end/quarter end marking up window dressing to die down to see how it reacts at resistance once we have most market participants back from vacation.

    For what it's worth the mean analyst target is around $700/share. The fundamentals looks solid. Obviously the company is profitable and EPS growth is up 28% YoY and nearly 24% QoQ. ROE is roughly 20% with a forward P/E of ~15. Other than maybe a lack of a dividend any reason why this is not a buy?

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    One of the "contributors" here recently summed up GOOG's charts. I'm decent at tech analysis, but this guy does a great job with the charts, and I don't feel more is needed right now; so check it out:

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    EDIT: Ok, I typed up the stuff lower before realizing that earnings for GOOG are on Jan 19th. Considering the strong 2nd and 3rd quarters, the bull in this stock could very well be nothing more than positioning for earnings. That it should break resistance would not surprise me at all since that is, imo, the path of least resistance.

    However, the chances of it failing to meet expectations are rising. If it becomes too crowded, well... You know what happens.

    Personally, I don't have the experience of this kind of play, so all I can say is that I'll be watching. I do, however, believe GOOG is a Buy, but couldn't tell ya when's the right moment.

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    But aside from all this, I think GOOG hitting up against 640 resistance and failing to consolidate could imply a breakout is imminent.

    And finally, you know, seeing this very same pattern in PIR like in that other thread, could it be that the market is poised for a strong bull move this week or next? I'll be very interested in finding out!

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    Forward P/E is less than 15. YHOO's forward P/E is over 18, BIDU has a forward P/E of almost 27, AOL's is over 40, INSP the parent to Dogpile Webcrawler and Metacrawler has a forward P/E of 23.9. I can't find Alibaba's forward P/E due to its pink sheet status but the aforementioned comps are the closest true search engine comps I could think of for GOOG.

    Is there another metric you look at when discounting the value of internet/search firms? Or, maybe you think the whole sector is rich. My personal opinion is GOOG is the best of breed in the sector and deserves to trade at a premium to its competitors but it is trading at an attractive discount based on forward earnings. Of course this means nothing if they blow earnings but the last quarter was good with 33.4% revenue growth and 24% EPS growth QoQ.

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