Google

Yesterday's rally was impulsive, since it surpassed two "internal" peaks and one external on the hourly chart. In this respect, the stock was stronger than the market as a whole, and it could lead the averages higher if the buying tempo picks up. That would take a print today above 544.40, the midpoint resistance of the pattern shown in the chart. A close above that Hidden Pivot would hint of more upside over the near term to as high as 550.46.

For the grave sin of reporting spectacular earnings and talking about new markets it plans to enter and conquer, Google's shares have been savaged in recent weeks. That's the price a company must sometimes pay when its shares are heavily in demand by institutional buyers keen on value. Even so, the so-far $94 shakeout from early January's peak has yet to take out a single prior low on the weekly chart, let alone the two we require to signal a bearish impulse leg. That would imply a further fall of $60, a possibility we would not disparage, given the fact that GOOG's sponsorship is so heavily skewed toward managed portfolios.

With Google helping lead the market lower, we should pay attention to a 542.61 Hidden Pivot support that could temporarily arrest the stock's fall.  That's my minimum downside objective for now, and it lies exactly $6.39 beneath yesterday's shell-shocked low.

It looks like there is still more damage to be done, and I therefore suggest using a Hidden Pivot support at 567.71 as a minimum downside objective, or 563.64 if any lower.  If the latter number is reached, the correction from early January's  high at 629.51 will have been a tad more than 10 percent.

A 586.08 target broached in the chat room Tuesday is still my minimum downside target for this correction. It is a Hidden Pivot midpoint, but if it is breached decisively we should infer that its 'D' sibling at 567.71 is in play. This matters because Google was a market leader in December, one of the few companies that seems able to make money hand-over-fist in a very tough economy. By implication, it would be bullish for the market as a whole if Google were to reverse and push above 611.39 this week without having reached 586.08.

Could the shakedown of this stock have been more obvious?  DaBoyz are apparently doing a vaudevillian turn on the old saying, "Buy the rumor, sell the news," since they have sold the bejeezus out of GOOG in the wake of a very significant new product introduction, the Nexus One cell phone. There's a Hidden Pivot support at 582.15 that we should try to buy, but I'll leave the logistics to you, since even February calls that are $20 out-of-the-money still sell for around $1600 apiece -- way too rich for my taste.  A stop-loss at  581.90 should be applied in any case.

Google has plunged nearly $30 from within 28 cents of our most recent rally target, decisively exceeding a 606.77 midpoint support with a 'D' sibling at 599.09.  That's where the stock is now headed, having crashed the midpoint, so you should be ready to bottom-fish there with a stop-loss as tight as you can handle.  If the order fills and survives, please let me know in the chat room so that I can establish a tracking position for your further guidance.

The spike on yesterday's opening brought GOOG within 28 cents of the 629.79 target flagged here last week. We held no position officially, but longs could have taken profits on half of their positions at the high, even if the intention was to replace the stock on the expected pullback.  It has amounted to $8 so far, with a low at 621.54  -- enough to lower the long-term cost basis of any shares still held.

Expect Google to climb to at least 629.79, but don't get bent out of shape if you can't find a way to board the rally in a manner that does not expose you to unacceptable risk.  Camouflage will be most difficult to find as the stock continues to bound into outer space in spectacularly uncorrected fashion.  We might have expected no less, since Google continues to make money the old-fashioned way, and to keep its edge through innovation and shrewd acquisitions.