Shares of Google (GOOG) ended Monday’s trading at $191.01, just barely above two critical price features.
The company’s stock has been trading in a $10 range between $190 and $200 since mid-December, holding out as one of the stronger Nasdaq 100 stocks.
That $190 price level has fortified itself as a “must-win” price as the stock’s short-term 20-day moving average is in the process of shifting into a short-term “sell” signal.
The 20-day moving average of a stock often acts as a technical barometer for short-term traders. In Google’s case, that trendline is in the process of shifting into a declining pattern, which would trigger additional selling.
Google shares have been a relative strength leader in the market after the company’s announcement of its quantum computing chip in December.
The company’s “Willow” chip has been heralded as a breakthrough in quantum computing power. The announcement was so powerful that it launched an entire industry of development stocks like Rigetti Computing (RGTI) and IonQ Corp (IONQ) into parabolic rallies.
Comments from Jensen Huang and Mark Zuckerberg over the last week have deflated the speculative activity in the quantum computing industry.
Returning to Google shares, a break below $190 per share will almost immediately target the $180 price. That move would threaten to add Google to the growing list of Nasdaq 100 stocks that are trading above their 50-day moving averages. Today, only 20 percent of the index can claim that title.
From a technical perspective, the decline is likely to create new buying opportunities for investors. Google shares are trading 35% higher over the last twelve months, handily beating the Nasdaq 100 and S&P 500 indexes returns.
