Google & Yahoo - Time For A Haircut?

First, it's important to realize some technology stocks have been totally beaten to a pulp. AMD is down from the mid forties to twenty dollars a share in a few months. At this rate, AMD will be to zero in two more months. That simply is not going to happen so some of the selling in technology has to abate at some point. Selling never lasts forever. But, it is important to heed the signals when they are given. Technology may rally but it appears a rally to new highs is a lows odds probability. Yahoo and Google have changed. Their persona is now one of biding time. The charts for both are below. First Yahoo then Google. Buying pressure is plotted against the price of both company's stock. Notice that both stocks are searching for direction. The prices have not collapsed but buying pressure surely has changed.

So, they are biding time for what? Another large move up? A resumption of a bull market? A brave new world where the economy explodes forward along with the price of both companies? Or a move down? Both companies have exhibited reduced volatility to the point where price volatility in Yahoo is at its lowest level in six years. With weakening sponsorship in the market and earnings this week, does it really matter or has the stock market already made up its mind? Longer term, I expect Google to test $170ish unless it makes significant new highs within the next few months.