Saturday, October 30, 2010

Google Encounters Resistance (Charts) *Continues below January 4, 2010 YTD high of $626.75* GOOG

GOOG

Google reported excellent Q3 financial results on October 14
Google is one of the top global brands


Google Overview

GOOG Google was up slightly this past week to close at $613.70 on Friday, October 29, 2010. Google was up +0.19% for the week, finished up a strong +16.70% in October, and is now only down -1.01% for the year. GOOG is up a market-beating +110.97% since the March 9, 2009 market bottom. This equates to a gain of +$1.17 for the week, up +$87.91 for October, down -$6.28 for the year, and up an incredible +$322.81 since the March 9, 2009 market bottom. GOOG is down -2.08% or -$13.05 from the 2010 YTD high of $626.75 on January 4. GOOG has now stayed above the leveling off 200 day simple moving average for 26 consecutive trading days.  After struggling in the Bear Abyss below $500, GOOG has been above $500 for 30 consecutive trading days and has now been above $600 for 11 consecutive trading days.

S&P 500 By comparison, the overall market, the S&P 500, was up +0.02% for the week, up +3.69% for October, up +6.11% for the year, and up +74.90% since the March 9, 2009 market bottom. SPX is down -2.79% from the April 23, 2010 YTD closing high of 1217.28. GOOG has been outperforming the market since the March 9, 2009 market bottom, underperforming for 2010, and outperforming in September and October. A review of the S&P 500 (S&P 500 Rally at Resistance (Charts) *Weekly gain just +0.18, +0.02%*) *Bulls rally 3 straight weeks, 7 of last 8*) is here.

Death Crosses and Reversal A third Death Cross occurred on June 4, the 100 day simple moving average crossed below the 200 day simple moving average. This is the only Death Cross still in effect. Previously, the 50 day simple moving average crossed below the 200 day simple moving average - the Death Cross or Black Cross, on May 25. Earlier, the 50d sma had crossed below the 100d sma on March 4. However, the 50d sma regained the 100d sma, on September 27 and has now regained the 200d sma on October 28, negating these 2 Death Crosses.

Google News and Fundamentals Google reported excellent Q3 earnings which are reviewed and analyzed on this blog. Current Google financial data, charts, and review is at the Google Financial Performance page, updated for the latest Q3 financial results reported on October 14. A review and analysis of the most recent Q3 earnings call is at the Google Earnings Conference Call page. Our valuation and target price of GOOG stock is posted at the Google Stock Valuation page. Revenues from outside of the United States were 52% of total revenues in the third quarter of 2010.

Economic and Market News Information about the USA and world economies is posted at Boom Doom Economy and Financial Controls.


Google Encounters Resistance

Google Daily Chart Below is the GOOG daily chart since October 14, when Google reported calendar Q3 earnings after market close and gapped up the next day. This it to illustrate the just the applicable price interactions with the current close, resistance, and support. GOOG has been testing resistance from October 2010, late 2009, and early 2010. A monthly chart is included at the bottom of this page for a broader perspective.

Noteworthy Closing Prices on Daily Chart Below
Current Close: $613.70
2010 YTD High, January 4: $626.75
2010 YTD Low, July 6: $436.07
YE December 31, 2009: $619.98

* The 50, 100, and 200 day simple moving averages and the uptrend line are not shown on the daily chart this week The lowest yellow line appears horizontal but is actually the downtrend line discussed below *


Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, generated a buy signal on Thursday, September 30. That is, the 25d sma is greater than the 50d sma. However, the relationship between these two moving averages is a lagging indicator and finally caught up with GOOG's strong September Bull Run +16.8%) that continued into October (+16.7%).

Resistance Because GOOG is below the 2010 YTD high set in January, there are multiples levels of resistance above. Google is at strong resistance and further gains may be hard won. Buyer conviction  for a higher price is questionable. The momentum from the excellent Q3 earnings report has played out and taken GOOG upwards to this price. GOOG is currently in a consolidation and distribution pattern for the past 9 trading days. Current resistance continues to be the 618.00 area, especially the October 18 peak and close of 617.71 (the highest yellow horizontal line on the daily chart above), although GOOG barely closed above on October  26 and 28 only to drop back below the next day.

Next significant resistance above is the peaking action from the December 28-31, 2009 closings of 622.87, 619.40, 622.73, and 619.98, respectively. Ultimately resistance is the January 4, 2010 YTD closing high of 626.75.

Support Because GOOG is above the YTD lows and summer trading range, there are multiple levels of support below. Current support are the recent closings of 607.98 on October 20 (the middle yellow horizontal line on the daily chart above) and 607.83 on October 19. Next support is the January 8 close of 602.02 and then the psychological and benchmark price of 600.00. Further below is significant support at the  the closing sub-peak, on April 15, of 595.30 (the lowest yellow horizontal line on the daily chart above).

Moving Averages GOOG continues well above all the daily simple moving averages: the 25, 50, 100, and 200 (only the 25d is shown on the daily chart above). The 25d sma continues ascending sharply and is above the 50d, 100d, and 200d sma's. The 50d bottomed on September 8, is now ascending sharply, regained the 100d sma on September 27, and now has regained the 200d sma on Thursday, October 28. The 100d is ascending, but is below the 200d. The 200d has been descending but is now leveling off.

Uptrend Line (Not shown on the daily chart this week) The yellow uptrend line, a rate of price ascent, is from the November 24, 2008 closing low of 257.44 up through the July 6, 2010 YTD closing low of 436.07. GOOG broke down through this trendline on August 30 and 31, but bounced above on September 1 and has remained above since.

Downtrend Line The yellow downtrend line, a rate of price descent, is from approximately the November 6, 2007 all-time closing high of 741.79 down through the January 4, 2010 high of 626.75, the peak YTD closing high so far. GOOG gapped up on October 15 to regain downtrend line for the first time since the YTD high on January 4 and has remained above for 11 consecutive trading days.

Relative Strength Index (RSI) The RSI 14 day = 83.01 continues overbought, even with the recent sideways trading. The recent low was 17.01 on August 24 and the unbelievable low of 4.79 on July 6. A 2010 YTD high, and multi-year high, of 94.12 was reached on September 27. The RSI 28 day = 78.25 is overbought, even with the recent sideways trading. The 2010 and multi-year high was 87.87 on October 18. The 2010 lows have been in the mid-20s. The RSIs have been pulled upwards by the September and October rally, spiked up on the October 15 gap up, and are now decreasing some with the recent sideways trading..

MACD (12,26,9) The MACD = +1.04, spiked upwards with the October 15 gap up, and has now downtrended for 8 consecutive trading days as a result of the sideways trading. The 2010 and multi-year high was +7.27 on October 19. The 2010 and multi-year low was -7.66 on January 26.

Volume GOOG traded a mere 2.3M on Friday, October 29, same as last Friday, October 22, after an incredible 14.8M shares on Friday, October 15, 2010, a YTD and multi-year high. The 20 day moving average has leveled off at approximately 3.9M. By comparison, the 50 day sma is approximately 3.1M. Buyer conviction at the current price and enthusiasm after the earnings report is waning.

Long-Term Trend The 10 month exponential moving average of 517.78 is a long-term indicator and shown on the monthly chart below. That is the line in the sand, so to speak, for the long-term signal of a bull or bear market. GOOG rallied above this indicator in September and has stayed above in October. GOOG had been mostly below this long term bear signal from April to August.

Conclusion On October 14, Google reported excellent Q3 earnings which are reviewed on the Google Financial Performance page Google is still an extraordinary cash flow machine! GOOG had rallied with the market and actually outperformed the market during September and October - even before the excellent Q3 earnings announcement. Google has set the bar high for the future and EPS growth. The intermediate-term trend is bullish and the long-term trend is bullish.


Google Monthly Chart
Up +138% and +$356.26 from November 28, 2008 cyclical closing low of $257.44!

Below is the monthly GOOG chart since the November 2008 cyclical low. The overall analysis and commentary is the same as for the daily chart above. The current price, the yellow horizontal lines, and the yellow uptrend and downtrend lines are the same, and as described, on the daily chart above. The white moving average line is the 10 month exponential moving average of 517.78, which is the long-term bull or bear market signal. GOOG rallied above 10m ema in September 2010 and the current close of.613.70 continues above, indicating a long term bull market.


Disclosure
We are long GOOG.


About Google

Google market capitalization is now 5th largest (up from #7 last week0 in USA at $195.59B, behind #1 Exxon $338.55B and #2 Apple $276.09B. Google is the 3rd largest technology company in USA by market capitalization behind Apple and Microsoft. Just in the past weeks, Google was 13th largest overall company and 4th largest technology company by market capitalization, until the spectacular rally on excellent Q3 earnings. Current Google financial data is at the Google Financial Performance page. Headcount: On a worldwide basis, Google employed 23,331 full-time employees as of September 30, 2010, up from 21,805 full-time employees as of June 30, 2010.

Google describes itself in press releases as, "Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google's targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia."

Google's Mission Statement: "Google's mission is to organize the world's information and make it universally accessible and useful. The first step toward fulfilling that mission came when our founders, Larry Page and Sergey Brin, working out of a Stanford University dorm room, developed a new approach to online search that quickly spread to information seekers around the globe. Google is now widely recognized as the world's largest search engine -- a free service whose utility and ease of use have made it one of the world's best-known brands almost entirely through word of mouth from satisfied users."


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GOOG

Wednesday, October 27, 2010

Google CEO Eric Schmidt: "Android is hugely profitable" (Review) Android Success: "well past anything I had ever hoped for" GOOG

GOOG


Google CEO Eric Schmidt: Android "well on its way to being a huge, huge success"


Q3 Earnings Call

Google reported excellent financial results for calendar Q3 2010. CFO Patrick Pichette said Google was experiencing "explosive growth in the digital economy". A review of the Google earnings conference call has been posted on the Google Earnings Conference Call page. The actual financial results, charts, and commentary have been posted on the Google Financial Performance page. The audio of the conference call is also available on the Google Earnings Conference Call page.

Senior Vice President and Chief Financial Officer Patrick Pichette and Senior Vice President of Product Management Jonathan Rosenberg gave presentations at the Q3 earnings call. Chairman of the Board and Chief Executive Officer Eric Schmidt then joined the conference call, along with President, Global Sales Operations and Business Development, Nikesh Arora, for the question and answer session.


Q3 Earnings Call: Question and Answer Session Highlights

"Phenomenal success of Android, well past anything I had ever hoped for" (Schmidt)
Android "well on its way to being a huge, huge success, in terms of number of partners, devices, open model for access, innovation, dynamics" (Schmidt)
90,000+ applications on Android and growing very, very fast (Schmidt)
"Android applications have Google search services inside of them" (Schmidt)
Mobile is larger than the PC market. Tablets are a small, but important, component of mobile. (Schmidt)
We hope Android to become leading platform in mobile, doing it with an open source approach (Schmidt)
Android is hugely profitable, but primary purpose right now is building this open platform (Schmidt)
We have mobile revenue model we are very excited about (Arora)
(Google) Revenues are roughly split between search, display, and applications efforts (Arora)
We can play across search, display, and applications to monetize mobile (Arora)
We don't see cannibalization between mobile and PCs, are complementary (Rosenberg)
Search monetization on handsets will become equal to then exceed PCs (Schmidt)
Clear separation between general economic growth and digital economy growth (Arora)
Web continues to grow at a blazing pace (Rosenberg)
Last reported 200,000 Android sets activated per day, no current information will be provided (Pichette)


Q3 Earnings Call: Question and Answer Session

Highest correlation of growth between ad clicks and anything else is query growth. New ad formats are also increasing ad clicks and click through rates. (Rosenberg)
Google will not comment on YouTube profitability (Pichette)
YouTube: 24 hours of video uploaded every minute, 2 billion views per day (Rosenberg)
Complex signals used for social networking, even if not directly accessible by Google (Schmidt)
We want users to be "more logged in" to Google to provide better social networking information to them (Schmidt)
We already have "significant feeds" from real-time information providers and sources of information, e.g. Twitter (Schmidt)
Real-time information feeds create the real-time index (Schmidt)
"Phenomenal success of Android, well past anything I had ever hoped for" (Schmidt)
Android "well on its way to being a huge, huge success, in terms of number of partners, devices, open model for access, innovation, dynamics" (Schmidt)
90,000+ applications on Android and growing very, very fast (Schmidt)
"Android applications have Google search services inside of them" (Schmidt)
"Android is probably the largest single platform play in the market today" (Schmidt)
Mobile is larger than the PC market. Tablets are a small, but important, component of mobile. (Schmidt)
We hope Android to become leading platform in mobile, doing it with an open source approach (Schmidt)
We give the software (Android) away with the open source approach (Schmidt)
The people who use with Android search twice as much as anything else and there is more revenue associated with those searches (Schmidt)
Mobile search revenues are shared only with operator, more lucrative: more searches, more ads, more lucrative (Schmidt)
Android is hugely profitable, but primary purpose right now is building this open platform (Schmidt)
Costs per employee went down sequentially in Q3 but no special effort was made to accomplish this (Pichette)
We have mobile revenue model we are very excited about (Arora)
Revenues are roughly split between search, display, and applications efforts (Arora)
We can play across search, display, and applications to monetize mobile (Arora)
Display (advertising) will become a very large component of mobile revenues (Schmidt and Arora)
Android Store: goal is to make money for app developers, not a revenue goal for Google (Schmidt)
CPCs on mobile lower than on PCs (Rosenberg)
As mobile payment platforms get built into mobile devices, CPCs will go up substantially (Rosenberg)
We don't see cannibalization between mobile and PCs, are complementary (Rosenberg)
Search patterns: People use mobile more at lunch, after work, weekends, holidays (Rosenberg)
Both mobile and web/PC search are growing (Rosenberg)
Revenue growth good in USA and worldwide, UK has been a bit weaker (Arora)
Southern Europe growing faster than Northern, some Asian markets growing robustly (Arora)
Operator and handset manufacturer will make a lot of the monetization of handsets, Android OS is free.
Google will make on advertising and value-added services (Schmidt)
Search monetization on handsets will become equal to then exceed PCs (Schmidt)
Mobile should become a very strong revenue stream compared to PCs (Schmidt)
Interest continues to grow in mobile advertising in local, hyper-local, and click to call categories (Arora)
As payment platforms get built into mobile platforms, will be more interest from larger advertisers (Arora)
Clear separation between general economic growth and digital economy growth (Arora)
Traffic acquisition costs lower in Q3 because additional prior MySpace costs stopped and mix of ad network partners changed (Pichette)
Continuing to make algorithmic improvements to our ad targeting, which improves revenue performance on a per query basis (Schmidt)
Web continues to grow at a blazing pace (Rosenberg)
Google Instant will be available on mobile devices soon, this year (Rosenberg)
Last reported 200,000 Android sets activated per day, no current information will be provided (Pichette)
Smart pricing (ads) is done by algorithm, doesn't differentiate between mobile & PC (Rosenberg)
Leveraging user data: we are not going to do very much of it, end user data privacy important (Schmidt)
A lot more rich media, video, in the display network in the future (Arora)
Entire partner network, entire Google network is part of display network (Arora0



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GOOG

Sunday, October 24, 2010

Google Bull Run Continues! (Charts) *Up 16+% in both September & October* GOOG

GOOG

Google reported excellent Q3 financial results on Thursday, October 14


Google Overview

GOOG Google continued rallying this past week to close at $612.53 on Friday, October 22, 2010. Google was up +1.84% for the week, is up +16.50% in October, and now only down -1.20% for the year. GOOG is up a market-beating +110.57% since the March 9, 2009 market bottom. This equates to a gain of +$11.08 for the week, up +$86.74 for October, down -$7.45 for the year, and up an astronomical +$321.64 since the March 9, 2009 market bottom. GOOG is down -2.27% or -$14.22 from the 2010 YTD high of $626.75 on January 4. GOOG has now stayed above the descending 200 day simple moving average for 21 consecutive trading days.  After struggling in the Bear Abyss below $500, GOOG has been above $500 for 25 consecutive trading days and has now been above $600 for 6 consecutive trading days.

S&P 500 By comparison, the overall market, the S&P 500, is up +0.59% for the week, up +3.67% for October, up +6.10% for the year, and up +74.87% since the March 9, 2009 market bottom. SPX is down -2.81% from the April 23, 2010 YTD closing high of 1217.28. GOOG has been outperforming the market since the March 9, 2009 market bottom, underperforming for 2010, outperforming for October and during this current market rally, and outperforming this past week. A review of the S&P 500 (S&P 500 Ekes Out A Weekly Gain (Charts) *Bulls rally 3 straight weeks, 7 of last 8*) is here.

Death Crosses and Reversal A third Death Cross occurred on June 4, the 100 day simple moving average crossed below the 200 day simple moving average. Previously, the 50 day simple moving average crossed below the 200 day simple moving average - the Death Cross or Black Cross, on May 25. Earlier, the 50d sma had crossed below the 100d sma on March 4. However, the 50d sma has now regained the 100d sma, on September 27, negating this earliest Death Cross.

Google News and Fundamentals Google reported excellent Q3 earnings which are reviewed and analyzed on this blog. Current Google financial data, charts, and review is at the Google Financial Performance page, updated for the latest Q3 financial results reported on October 14. A review and analysis of the most recent Q3 earnings call is at the Google Earnings Conference Call page. Revenues from outside of the United States were 52% of total revenues in the third quarter of 2010.

GOOG Earnings per Share Earnings per share for the past 4 quarters have been: Dec09 $6.13, Mar10 $6.06, Jun10 $5.71, Sep10 $6.72, which totals $24.62. At the current GOOG stock price of $612.53, this is a PE of 24.9, which is reasonable, but not high, and above the recent 20-23 range (before Q3 earnings were reported).

GOOG Cash Flow per Share Cash Flow from Operations per Share for the past 4 quarters were Dec09 $8.48, Mar10 $8.01, Jun10 $6.47, Sep10 $8.95, which totals $31.95. At the current GOOG stock price of $612.53, this is a cash flow multiple of 19.2, which is reasonable, but not high.

GOOG Stock Valuation Even now, the current GOOG price of $612.53 appears low, yet continues to reflect some uncertainty over the future EPS growth rate. We believe GOOG is still undervalued and our preliminary price target is $650. A continuation, and validation, of earnings  per share growth in Q4 will determine if GOOG should be valued even higher.

Economic and Market News Information about the USA and world economies is posted at Boom Doom Economy and Financial Controls.


Google Bull Run Continues!

Google Daily Chart Below is the GOOG daily chart since late December 2009 to illustrate how far Google dropped from the January 2010 highs, how much Google has recovered (making up much of the lost ground in one day, October 15!), and the price interactions for recent resistance and support. A monthly chart is included at the bottom of this page for a broader perspective.

Noteworthy Closing Prices on Daily Chart Below
Current Close: $612.53
2010 YTD High, January 4: $626.75
2010 YTD Low, July 6: $436.07
YE December 31, 2009: $619.98


Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, generated a buy signal on Thursday, September 30. That is, the 25d sma is greater than the 50d sma. However, the relationship between these two moving averages is a lagging indicator and finally caught up with GOOG's amazing September Bull Run +16.8%) that now continues into October (+16.5%).

Resistance Because GOOG is below the 2010 YTD high set in January, there are multiples levels of resistance above. Google is at strong resistance and further gains may be hard won. The momentum from the excellent Q3 earnings report has played out and taken GOOG upwards to this price. GOOG is currently in a consolidation and distribution pattern for the past 3 days. Current resistance is the October 18 peak and close of 617.71 (the highest yellow horizontal line on the daily chart above). Next significant resistance above is the peaking action from the December 28-31, 2009 closings of 622.87, 619.40, 622.73, and 619.98, respectively. Next is the January 4, 2010 YTD closing high of 626.75.

Support Because GOOG is above the YTD lows and summer trading range, there are multiple levels of support below. Current support are the recent closings of 607.98 on October 20 (the middle yellow horizontal line on the daily chart above) and 607.83 on October October 19. Next support is the January 8 close of 602.02 and then the psychological and benchmark price of 600.00. Further below is significant support at the  the closing sub-peak, on April 15, of 595.30 (the lowest yellow horizontal line on the daily chart above).

Moving Averages GOOG has now regained all the moving averages on the daily chart above: the 25, 50, 100, and 200 day simple moving averages. The 25d sma is now ascending very steeply and is above the 50d, 100d, and 200d sma's. The 50d bottomed on September 8, is now ascending sharply, has regained the 100d sma, but is still below the 200d sma. The 100d is ascending, but is below the 200d. The 200d continues to descend but is about to level off.

Uptrend Line The yellow uptrend line, a rate of price ascent, is from the November 24, 2008 closing low of 257.44 up through the July 6, 2010 YTD closing low of 436.07. GOOG broke down through this trendline on August 30 and 31, but bounced above on September 1 and has remained above since.

Downtrend Line The yellow downtrend line, a rate of price descent, is from approximately the November 6, 2007 all-time closing high of 741.79 down through the January 4, 2010 high of 626.75, the peak YTD closing high so far. GOOG gapped up on October 15 to regain downtrend line for the first time since the YTD high on January 4 and has remained above for 6 consecutive trading days.

Relative Strength Index (RSI) The RSI 14 day = 84.39 is overbought. The recent low was 17.01 on August 24 and the unbelievable low of 4.79 on July 6. A 2010 YTD high, and multi-year high, of 94.12 was reached on September 27. The RSI 28 day = 83.83 is overbought. The 2010 and multi-year high was 87.87 on October 18. The 2010 lows have been in the mid-20s. The RSIs have been pulled upwards by the September and October rally and spiked up on the October 15 gap up.

MACD (12,26,9) The MACD = +6.04, spiked upwards with the October 15 gap up, and is now downtrending. The 2010 and multi-year high was +7.27 on October 19. The 2010 and multi-year low was -7.66 on January 26.

Volume GOOG traded a mere 2.3M on Friday, October 15 after an incredible 14.8M shares on Friday, October 15, 2010, a YTD and multi-year high. The 20 day moving average is approximately 3.95M, is uptrending, and was 3.1M two days before! By comparison, the 50 day sma is approximately 3.2M.

Long-Term Trend The 10 month exponential moving average of 517.57 is a long-term indicator and shown on the monthly chart below. That is the line in the sand, so to speak, for the long-term signal of a bull or bear market. GOOG rallied above this indicator in September and has stayed above in October. GOOG had been mostly below this long term bear signal from April to August.

Conclusion On October 14, Google reported excellent Q3 earnings which are reviewed on the Google Financial Performance page Google is still an extraordinary cash flow machine! GOOG had rallied with the market and actually outperformed the market during September and October - before the excellent Q3 earnings announcement. Google has set the bar high for the future and EPS growth. The intermediate-term trend is bullish and the long-term trend is bullish.


Google Monthly Chart
Up +138% and +$355.09 from November 28, 2008 cyclical closing low of $257.44!

Below is the monthly GOOG chart since the November 2008 cyclical low. The overall analysis and commentary is the same as for the daily chart above. The current price, the yellow horizontal lines, and the yellow uptrend and downtrend lines are the same, and as described, on the daily chart above. The white moving average line is the 10 month exponential moving average of 517.57, which is the long-term bull or bear market signal. GOOG rallied above 10m ema in September 2010 and the current close of.612.53 continues above, indicating a long term bull market.


Disclosure
We are long GOOG.


About Google

Google market capitalization is now 7th largest in USA at $195.22B, behind #1 Exxon $337.79B and #2 Apple $280.89B. Google is the 3rd largest technology company in USA by market capitalization behind Apple and Microsoft. Just in the past weeks, Google was 13th largest overall company and 4th largest technology company by market capitalization, until the spectacular rally on excellent Q3 earnings. Current Google financial data is at the Google Financial Performance page. Headcount: On a worldwide basis, Google employed 23,331 full-time employees as of September 30, 2010, up from 21,805 full-time employees as of June 30, 2010.

Google describes itself in press releases as, "Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google's targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia."

Google's Mission Statement: "Google's mission is to organize the world's information and make it universally accessible and useful. The first step toward fulfilling that mission came when our founders, Larry Page and Sergey Brin, working out of a Stanford University dorm room, developed a new approach to online search that quickly spread to information seekers around the globe. Google is now widely recognized as the world's largest search engine -- a free service whose utility and ease of use have made it one of the world's best-known brands almost entirely through word of mouth from satisfied users."


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Friday, October 22, 2010

Sony Launches Version of Google TV (Videos) "Sony Internet TV with Google TV"

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Sony has unveiled their version of Google TV built right into the TV


Sony Launches Version of Google TV

Sony now has their version of Google TV, after Logitech officially launched Google TV two weeks ago. The Logitech launch was covered in a previous post here (Logitech Launches Google TV). Logitech utilizes a Google TV box, the Revue, while Sony has built Google TV into the Sony television. Below is a CNET video reviewing the Sony version and a video of the recent Sony ad for Sony Internet TV with Google TV. The Intel Atom processor powers Google TV.


(CNETTV) CNET reviews Sony TV with Google TV

 
video


(Sony) Introducing Sony Internet TV, the world's first HDTV powered by Google TV. Television and Internet are together at last.



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Saturday, October 16, 2010

Google Is Back! (Charts) *Reports excellent Q3 earnings, up $60.52 on Friday* GOOG

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Google reported excellent Q3 financial results on Thursday, October 14


Google Overview

GOOG Google created its own rally this last week with excellent Q3 earnings reported on Thursday, to close up +$60.45 at $601.45 on Friday, October 15, 2010! Google is up +12.14% for the week, up +14.39% in October, and now only down -2.99% for the year. GOOG is up a market-beating +106.76% since the March 9, 2009 market bottom. This equates to a gain of +$65.10 for the week, up +$75.66 for October, down -$18.53 for the year, and up an amazing +$310.56 since the March 9, 2009 market bottom. GOOG is down -4.04% or -$25.30 from the 2010 YTD high of $626.75 on January 4. GOOG has now stayed above the descending 200 day simple moving average for 16 consecutive trading days.

S&P 500 By comparison, the overall market, the S&P 500, is up +0.95% for the week, up +3.07% for October, up +5.48% for the year, and up +73.86% since the March 9, 2009 market bottom. SPX is down -3.38% from the April 23, 2010 YTD closing high of 1217.28. So, GOOG has been under performing the market YTD in 2010. GOOG has now outperformed the market since the March 9, 2009 market bottom and during this current market rally.  A review of the S&P 500 (S&P 500 Posts Another Weekly Gain (Charts) *Bulls rally 6 of last 7 weeks*) is here.

Death Crosses and Reversal A third Death Cross occurred on June 4, the 100 day simple moving average crossed below the 200 day simple moving average. Previously, the 50 day simple moving average crossed below the 200 day simple moving average - the Death Cross or Black Cross, on May 25. Earlier, the 50d sma had crossed below the 100d sma on March 4. However, the 50d sma has now regained the 100d sma, on September 27, negating this earliest Death Cross.

Google News and Fundamentals Current Google financial data, charts, and review is at the Google Financial Performance page. Google reported excellent Q3 earnings which are reviewed on that page. GOOG is currently trading at 24.43 PE (ttm). Earnings per share for the past 4 quarters have been: Dec09 $6.13, Mar10 $6.06, Jun10 $5.71, Sep10: $6.72, which totals $24.62. At the current GOOG stock price of $601.45, that's a PE of 24.43 (ttm). GOOG has been trading for most of 2010 with a PE a little lower in the 20s. Even now, the current GOOG price of $601.45 appears low, yet continues to reflect some uncertainty over the future EPS growth rate. Revenues from outside of the United States were 52% of total revenues in the third quarter of 2010.

Economic and Market News Information about the USA and world economies is posted at Boom Doom Economy and Financial Controls.


Google Is Back! Gaps Up on Friday!

Google Daily Chart Below is the GOOG daily chart since December 2009 to illustrate how far Google dropped from the January 2010 highs, how much Google has recovered (making up much of the lost ground in one day, October 15!), and recent resistance and support. A monthly chart is included at the bottom of this page for a broader perspective.

Noteworthy Closing Prices on Daily Chart Below
Current Close: $601.45
2010 YTD High, January 4: $626.75
2010 YTD Low, July 6: $436.07
YE December 31, 2009: $619.98


Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, generated a buy signal on Thursday, September 30. That is, the 25d sma is greater than the 50d sma. However, the relationship between these two moving averages is a lagging indicator and finally caught up with GOOG's amazing September Bull Run +16.8%) that now continues into October (+14.4%).

Resistance Because GOOG is below the YTD and all-time high set in January, there are multiples levels of resistance above. In the past few weeks on these posts, it was stated further gains by Google would be hard won. The excellent Q3 earnings overcame that resistance. GOOG, on Friday, October 15, closed and stopped just short of the January 8, 2010 closing sub-peak of 602.02, which is now recent resistance (the higher yellow horizontal line on the chart above). The next significant resistance above is the peaking action from the December 28-31, 2009 closings of 622.87, 619.40, 622.73, and 619.98, respectively. Next is the January 4, 2010 YTD closing high of 626.75.

Support Because GOOG is above the YTD lows and summer trading range, there are multiple levels of support below. Current support is the closing sub-peak, on April 15, of 595.30 (the lower yellow horizontal line on the daily chart above). Next significant support is the sub-peak close of 581.14 on March 11. The descending 200 day simple moving average (518.99) was resistance but is now distant support.

Moving Averages GOOG has now regained all the moving averages on the daily chart above: the 25, 50, 100, and 200 day simple moving averages. The 25d sma is now ascending steeply and has regained the 50d and 100d sma's and is approaching the 200d sma. The 50d bottomed on September 8, is now ascending, has regained the 100d sma, but is still below the 200d sma. The 100d is ascending, but is below the 200d. The 200d continues to descend showing the price damage GOOG has suffered this year that this rally is slowly mending.

Uptrend Line The yellow uptrend line, a rate of price ascent, is from the November 24, 2008 closing low of 257.44 up through the July 6, 2010 YTD closing low of 436.07. GOOG broke down through this trendline on August 30 and 31, but bounced above on September 1 and has remained above since.

Downtrend Line The yellow downtrend line, a rate of price descent, is from approximately the November 6, 2007 all-time closing high of 741.79 down through the January 4, 2010 high of 626.75, the peak YTD closing high so far. GOOG gapped up on October 15 to regain downtrend line for the first time since the YTD high on January 4!

Relative Strength Index (RSI) The RSI 14 day = 82.47 is now overbought, pulled up higher by the October 15 gap up. This is well above the recent low of 17.01 on August 24 and the unbelievable low of 4.79 on July 6. A 2010 YTD high, and multi-year high, of 94.12 was reached on September 27. The RSI 28 day = 87.20 is overbought, pulled up higher by the October 15 gap up, and is a 2010 YTD high and also a multi-year high. This is well above the 2010 lows in the mid-20s. The RSIs have been pulled upwards by the rally and spiked up on the October 15 gap up.

MACD (12,26,9) The MACD = +3.68, spiking upwards with the October 15 gap up, after being +0.18 the day before.

Volume GOOG traded an incredible 14.8M shares on Friday, October 15, 2010, a YTD and multi-year high. The 20 day moving average is approximately 3.8M, is uptrending, and was 3.1M two days before! By comparison, the 50 day sma is approximately 3.0M.

Long-Term Trend The 10 month exponential moving average of 515.55 is a long-term indicator and shown on the monthly chart below. That is the line in the sand, so to speak, for the long-term signal of a bull or bear market. GOOG rallied above this indicator in September and has stayed above in October. GOOG had been mostly below this long term bear signal from April to August.

Conclusion On Thursday, Google reported excellent Q3 earnings which are reviewed on the Google Financial Performance page Google is still an extraordinary cash flow machine! Cash Flow from Operations per Share for the past 4 quarters were Dec09 $8.48, Mar10 $8.01, Jun10 $6.47, Sep10 $8.95, which totals $31.95. At the current GOOG stock price of $601.45, that's a Cash Flow Multiple  of 18.82 (ttm), which appears very reasonable. After struggling in the Bear Abyss below $500, GOOG has now been above $500 for 20 consecutive trading days, is now above $600, and should continue above $600. GOOG had rallied with the market and actually outperformed the market during September and October - before the excellent Q2 earnings announcement. Earnings season and ongoing economic data will determine any continued rally for GOOG after the glow of Q3 earnings wear off. Google has set the bar high for the future and EPS growth. The intermediate-term trend is bullish and the long-term trend is bullish.


Google Monthly Chart

Below is the monthly GOOG chart since October 2007, including the all-time highs of November 2007. The overall analysis and commentary is the same as for the daily chart above. The current price, the yellow horizontal lines, and the yellow uptrend and downtrend lines are the same, and as described, on the daily chart above. The white moving average line is the 10 month exponential moving average of 515.55, which is the long-term bull or bear market signal. GOOG rallied above 10m ema on September 24 and the current close of.601.45 continues above, indicating a long term bull market.


Disclosure
We took a position in Google this past week, we are long GOOG.


About Google

Google market capitalization is now 7th largest in USA at $191.69B, behind #1 Exxon $331.693B and #2 Apple $287.53B. Google is the 3rd largest technology company in USA by market capitalization behind Apple, and Microsoft. Just in the past weeks, Google was 13th largest overall company and 4th largest technology company by market capitalization, until this spectacular rally on excellent Q3 earnings. Current Google financial data is at the Google Financial Performance page. Headcount: On a worldwide basis, Google employed 23,331 full-time employees as of September 30, 2010, up from 21,805 full-time employees as of June 30, 2010.

Google describes itself in press releases as, "Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google's targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia."

Google's Mission Statement: "Google's mission is to organize the world's information and make it universally accessible and useful. The first step toward fulfilling that mission came when our founders, Larry Page and Sergey Brin, working out of a Stanford University dorm room, developed a new approach to online search that quickly spread to information seekers around the globe. Google is now widely recognized as the world's largest search engine -- a free service whose utility and ease of use have made it one of the world's best-known brands almost entirely through word of mouth from satisfied users."


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