GOOGLE (GOOGL) – Should You Buy The Recent Dip in the Stock?

Evan Carthey·June 3, 2019·0 comments

Google (GOOGL) – should you buy the recent dip in the stock? is the big question for the undisputed internet search king, especially in the Western hemisphere.

But recently the stock has been going down. This post will be about GOOGLE (GOOGL): Should You Buy Their Recent Dip in the Stock? Since its high of $1289 back in April 2019 the stock has had two big dips to take it to around $1030 to where it currently is located.

This post will look at the 7 fundamental factors I look for to see if a stock can be considered a growth stock. We will also look at the technical analysis based upon the setups I created and use for how I trade.

GOOGLE (GOOGL) – Should You Buy Their Recent Dip in the Stock? – Fundamentals

There are 7 fundamental markers I look for in a stock. I try to only purchase growth stocks so these are the parameters I look for to see if a stock meets the majority of the markers. I prefer to have all seven fulfilled. You can it more in-depth here: https://evancarthey.com/how-to-scan-for-winning-stocks-an-insiders-view-to-my-process/

Market Cap: > $300 million
EPS growth past 5 years: >0%
P/E: Over 10
EPS growth next 5 years: >0%
Sales growth past 5 years: Over 20%
Debt/Equity: <0.1
Sales growth qtr over qtr: Over 5%

Does the stock meet these 7 markers?

Market Cap: 771.18B (YES)
EPS growth past 5 years: 19.60% (YES)
P/E: 27.75 (YES)
EPS growth next 5 years: 15.76% (YES)
Sales growth past 5 years: 19.80% (NO)
Debt/Equity: 0.00 (YES)
Sales growth qtr over qtr: 16.70% (YES)

I used Finviz.com for the fundamental analysis screener.

There is only one marker Google did not hit and that was the Sales growth past 5 years. But they only missed it by 0.20%. So with that said this will be a stock I would consider a growth stock. It met the rest of the markers. This is a stock I would be looking at purchasing based upon the markers it passed. This is definitely a stock to keep on your radar. So this dip on the fundamental level looks like it could be a great buying opportunity.

Technical Analysis – GOOGLE (GOOGL) – Should You Buy The Recent Dip in the Stock?

Google Daily Stock Chart — Google Daily Chart Long

The first setup we will look at is a 127 Long Setup. The current exit is the top of the blue box at $1155. But if price continues to decline without hitting the top of the blue box and goes down and hits the pink line then the exit will move to the top of the teal box at $1063.

That will be the last time the exit moves, even if the price continues to move lower. So with the current price being at $1034 this is what I consider a “free trade.” Even if price goes down and hits the pink line the final exit will be higher than your current entry.

If the blue box exit is hit before the pink line entry then the move is over. Do not try to get in at the pink line. The move will be over and we will look for another setup.

For this setup it is the 61B Long Setup. The current exit is the top of the teal box at around $1155. But if the price continues to go down and hit the pink line at $999 then the exit moves to the top of the green box at around $1055. If that exit is not hit either and price continues to move lower and hits the lowest pink line at $897 then all exits move to the top of the blue box at around $992. This will be the final time the exit moves. Even if the price continues to drop the exit does not move.

The same rules apply as the previous chart where if an exit is hit with an entry left then remove the entry. Do not get into the stock after an exit is hit. The move is over and time to look for a new setup.