When reviewing Alphabet Inc. (GOOGL) in late April ahead of its earnings release, I was a confused Oracle of Delphi writing that, "Handicapping a widely followed stock ahead of an earnings release is hard. The best and the brightest and the most connected have placed their bets so to speak and I have to shift through the price and volume data to see if there are any clues. We have a battle between the east and the west with western indicators having a bullish slant and the eastern candlestick poised for a reversal. We have risk and that implies opportunity, unfortunately I don't have a strong conviction at this point in time."
Prices actually declined into late April/early May before rallying back the past five weeks. With the price of Action Alerts PLUS holding GOOGL close to a test of its January and March highs a fresh review of the charts and indicators is a good idea Wednesday morning.
In the daily bar chart of GOOGL, below, we can see two bullish flag formations -- one in May and another one playing out since the beginning of June. If this second flag pattern plays out according to the textbook we should soon see an upside sprint of around $75. A $75 rally should take GOOGL to around $1,200. Strength above $1,200 could be a breakout from a large five-month consolidation pattern.
Since the beginning of June the slope of the 50-day moving average line turned bullish. The 200-day line is also pointed up. The daily On-Balance-volume (OBV) line has been moving sideways all year but with up-and-down swings that roughly mirror the price action. The trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in early May to generate an outright go long signal.
In the weekly bar chart of GOOGL, below, we see some bullish price-driven indicators and a neutral volume picture. Prices are above the rising 40-week moving average line. The weekly OBV line is neutral and has been for months.
The weekly MACD oscillator (bottom panel on the chart) recently crossed to the upside for a fresh outright weekly buy signal.
In this Point and Figure chart of GOOGL, below, we can see an upside a potential price target of $1335.57. Breakout trades of $1172.11 and $1207.62 will be needed, however.
Bottom line: GOOGL looks poised to rally to new highs. Longs should continue to hold positions risking below $1,075. Strength above $1,200 should open the way to gains to $1,335 and perhaps higher in the months ahead.