Alphabet Could See More Downside Slippage - Serious Weakness Not Likely

 | Sep 14, 2018 | 10:37 AM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:


Alphabet Inc. (GOOGL) was reviewed in July where I wrote that "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."

With our trading stop being tested as prices are down from the late July zenith a fresh look at GOOGL is in order.

(For more on GOOGL, see The Apple Revolution: Cramer's 'Mad Money' Recap.)

In this daily bar chart of GOOGL, below, we can see that prices have been below the still rising 50-day moving average line all month so far. If this continues we should see the average line turn lower.

The 200-day moving average line intersects around $1,125 - not all that far away.

The daily On-Balance-Volume (OBV) line has been weakening the past six weeks and indicates that sellers of GOOGL have been more aggressive with heavier volume being traded on days when the stock has closed lower.

In the bottom panel is the 12-day price momentum study which does not indicate that the pace of the decline is slowing.

In this weekly bar chart of GOOGL, below, we can see that prices are still above the rising 40-week moving average line but GOOGL has tested the 40-week average in the past and could do so again.

The weekly OBV line looks like it is rolling over the past two months and the weekly Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside.

This crossover is a signal to take profits in an uptrend.

In this Point and Figure chart of GOOGL, below, we can see a downside price target of $1,134. That sort of decline, should it happen, would test the 200-day and 40-week moving average lines.

Bottom line strategy: GOOGL might experience some more downside weakness but I do not see a serious decline from the charts now.

Columnist Conversations

Tilray's staggering 41% rise this morning leaves the company with an insane valuation and leaves Canopy Growth...
I badly want to be the person that calls the top in red-hot cannabis stocks, but fear looking like a short-ter...
Now the government will get to really dive into the inner workings of Tesla (TSLA) . Who knows what else they...
In GS I see key price support at the 224.49-226.42 area.  I also have timing for a possible low.  I ...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.