Google (GOOG) - towards $700?

On Friday there was news that some analysts raised the target price of Google to $700 per share, while Google was trading a little below $600.

Theoretically, the target price by analysts should served as a reference point over a certain period of time (e.g. 12 months), but exactly how important is target price in reality?

It is actually not the target price itself but how investors react to the target price. How institutional investors react to the target price is more important than how small guys react to it. I neither saw too much of a craziness about the upward-revised price target nor a meaningful selloff on Friday, which is good for investors who like stocks with less volatility.

Over a certain length of time, it is not about who is right and who is wrong on the stock, but who has more power to take the stock to wherever he wants to take.

I don't know if Google will reach $700 soon, what I saw was a few things:

1. Google (graphically) survived in August selloff, its 20-day EMA did not go below the 50-day EMA, a very strong graphical pattern

2. It rallied with the market from beginning of September

3. It also made new highs recently

In the meantime its 20-day EMA is about 12% higher than its 200-day EMA. Given a company's size now as big as Google it is not unreasonable. It seems like if market continues to perform well, Google should go with the market. The potential return from here may not be very high but the probability of a significant gap down is also lower compared to some smaller cap companies. Going short against a stock that just made new high is also too dangerous.

So, at a price of near $600, Google is still worth to put under the radar. If I have the money I'll try a position when it gets to the 20-day EMA (currently around $560). Just my guess.