Alphabet Inc. (GOOGL) is trading around 8% higher in pre-market activity in reaction to its second-quarter numbers. Let's check out the charts.
In the daily bar chart of GOOGL, below, we can see the price action through Thursday's close. With pre-market prices around $1,230 we can imagine that part of the gap from late April is being filled. Prices will be well above the declining 50-day and 200-day moving averages.
Volume is likely to be heavy and the On-Balance-Volume (OBV) line will be turning upward. The Moving Average Convergence Divergence (MACD) oscillator should improve too.
In the weekly bar chart of GOOGL, below, we can see that prices have been in a large consolidation pattern with lows in the $1,000 area and peaks up above $1,250. Friday's early trading should put prices back up around the top end of the range. GOOGL will be above the slightly rising 40-week moving average line.
The weekly OBV line has been weak the past twelve months but a volume surge today should start to improve the OBV line. The weekly MACD oscillator has narrowed in recent weeks and a bullish crossover could happen in the near-term.
In this Point and Figure chart of GOOGL, below, an upside price target of $1,292 is indicated.
Bottom-line strategy: With big gaps (up or down) it is difficult to have a concrete trading plan. Why? The main problem is what to risk. I would stand aside a few days to see how things develop.
