Google Inc. (NASDAQ: GOOG) Tests Support Afterhours

July 18, 2008

Shares of Google Inc. (NASDAQ: GOOG) declined some 8% in afterhours trading after the company said second-quarter earnings came in slightly below expectations. Earnings, excluding special items, were $4.63 a share. Analysts had estimated Google would post earnings excluding special items of $4.74 a share on $3.87 billion in net revenue.

Google was trading at $490.50 a share near the end of afterhours trading. This places Google shares just above critical Fib support at $485.73 a share.

A close below critical support would forecast a test of the prior correction lows at $413.62 a share in coming weeks, so trading over the next several days must hold above support or the current mild decline will become a substantial decline.

Traders should watch the $485 level. A decisive close below will likely be followed by considerably lower prices in coming weeks. Should support hold, we could see a resumption of the rally begun in April.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.