In the middle of February 2014 Google’s stock prices reached $615 per share. Ten months later, in December, it touched $490. This 125-dollar decline could be enough to frighten some investors, but in our opinion there is nothing to worry about. First of all, $490 turned out to be a strong enough support level, which led to a sharp bounce. On December 29th Google managed to climb above the $530 mark. Second, and much more important, the wave structure of this rise reminds us of a five-wave impulse.
According to the Elliott Wave Principle, every impulse is followed by a three-wave correction in the opposite direction. You can see this a-b-c decline on the chart as well. We have a complete 5-3 wave cycle, which means that Google stock prices should be expected to go even higher from now on. However, keep in mind that wave (2)/B is a bit shallow, so it could extend into a deeper and more complicated correction. Nevertheless, Google should be looked at from the bullish side as long as $490 holds on.
