I looked at GOOGL's chart on Tuesday as part of my analysis of the FANGs. As I wrote, the stock is showing "curious mixed signals. The price action since January looks like a high-level consolidation or continuation pattern. Fans of William O'Neil might consider it a cup-and-handle pattern, [but] let's look closer."
Well, here's an updated daily bar chart for the stock:
As I wrote on Tuesday, the price pattern might look like a cup and handle, but the volume and the On-Balance Value line (marked "OBV" above) aren't what I would want to see. Volume should be heavier in the pattern's right half and the OBV line should be rising as buyers become more aggressive anticipating an upside breakout.
However, volume has actually diminished since April, while the OBV line is in a decline from March. The momentum study (marked "Momentum (12)" above) shows equal highs from May, which is a bearish divergence compared to the price action.
Still, despite Wednesday's negative EU news and the fact that volume and momentum are "not in gear," we still see GOOGL's price pushing higher. In this weekly bar chart of GOOGL, we can see that the uptrend in prices over past three years has been very durable:
Prices have stayed above the rising 40-week moving average line for most of the time. The weekly OBV line is also more bullish than the daily line, while the weekly Moving Average Convergence Divergence oscillator (MACD) crossed to a fresh outright "Go Long" signal in early June.
A weekly close above $1,225 will make the chart look a lot stronger regardless of the observation that volume isn't "in gear." Longs should raise sell stop protection to below the "handle" or below $1,100.
In this Point and Figure chart, we can see a large double-top breakout to a new high and a bullish price target of $1,439:
The Bottom Line
When a stock ignores what appears to be bearish fundamental news like Wednesday's EU fine against Alphabet, you have to be impressed. Investors are looking ahead six months or more and remain bullish.
My recommendation: Stay long, with a $1,100 investing stop and a $1,170 trading or short-term stop. Your price targets from the charts above should be $1,300 -- and then $1,439.
(This column has been updated with a new chart and price target.)