Google (GOOG) made a bullish breakout above the bull flat pattern as expected in our previous wave analysis. But a bearish pullback is taking place soon after price confirmed a higher high.
Price action is now testing the key support trend line (green) and the Fibonacci support. Let’s review what to expect.
Google seems to be in a wave 4 (pink) pattern. This means that the 38.2% Fibonacci retracement level is a key support zone within the uptrend.
A bullish bounce at the Fib could confirm our view. But a breakout above the resistance trend line (orange) and 21 ema zone is needed to indicate the end of wave 4 and start of wave 5 (pink).
Even a deeper retracement towards the 50-61.8% Fibonacci zone could be part of a wave 4. But a break below the 61.8% Fib certainly places the uptrend on hold (yellow circle) whereas a break below the top of wave 1 invalidates it (red circle).
On the 1 hour chart, price action is building an ABC (grey) pattern. Which could complete wave 4 (pink) if price action can break above the local resistance (orange boxes) and long-term moving averages.
A break below the support trend line (green) indicates a push towards the 50% Fibonacci level mentioned on the 4 hour chart.
The bullish targets are first $1,800, followed by the previous top at $1,846 and the -27.2% Fibonacci target at around $1,950.