I have been reminded of the giants of the U.S. new economy in the wake of the latest spat between Google (GOOG) and the EU, where the latter has been accusing the search engine pioneer of abusing its dominant position in the market. This has apparently been particularly so with regard to shopping searches. But of course it should be remembered that this is a space that Google itself made, and obviously if you are the top of the heap in your space it should only be regarded as natural that you wish to press home your advantage. I say good luck to Google. The EU says, let’s fine them billions of Euros just because they are successful. If there ever was a reason for leaving the EU it is its propensity for punishing success and rewarding failure, according to socialist ideals, rather than any quibbles to do with sovereignty. Sovereignty in the 21st century is more to do with GDP, rather than any political power.
What may be said from a charting perspective is that the share price situation at Google looks to be somewhat complex. This is because we are in the wake of a double bull trap failure in March, with the problem since then being that all the near term moving averages are currently falling. This suggests that even though there may be intermediate bounces, the risk of a probe towards the area of the October price channel floor at $510 cannot be ruled out. Indeed, given the way that the authorities appear to be in witch hunt mode regarding Google, it may be that the sensible way forward – even for ardent bulls – would be to wait on any dips towards the 2014 uptrend line, just in case we are witnessing an extended negative turnaround here. But at least while the floor of last year’s price channel is held, one would be looking for an eventual return to the 200 day moving average zone at $551.
It would appear that the doubters have finally been sidelined at Facebook (FB), where the share price over the past couple of years has gone up, and stayed up. The overall pattern here is that of progress within a rising trend channel which can be drawn from the end of July. The floor of the channel currently runs just below the 50 day moving average now at $79.99. This would imply that even though the stock does not exactly look as though it is on fire, at least while there is no end of day close back below the 50 day line we are obliged to give the benefit of the doubt to the upside argument. This suggests that a 2014 price channel top target of $90 could be on the cards over the next 1-2 months, provided the channel floor is not broken. Only cautious traders would wait on a clearance of the initial April $83.94 peak before pressing the buy button.
Finally we have what is possibly my favourite new technology major, Twitter (TWTR). What makes this company even more intriguing is the way that rumours continue to circulate that the micro blog group could be taken over by Google. But what can be seen from the daily chart is that even if it is not, the charting set up appears strong. While there floor of a rising trend channel from July remains in place at $49.50 the expectation is that a top of channel target at $70 could be seen over the next 2-3 months – with or without a bid.
