Letters (Google) – Get Alphabet Inc. Report (WELL) – The Get Alphabet Inc. report hasn’t traded too well.
In February, the company reported strong earnings, announced a major buyback plan and announced a 1:20 stock split. About a month later, the tech and online retail giant Amazon (AMZN) – Get Amazon.com Inc. Report announced a stock split.
Amazon stock had a nice rally before its 1:20 stock split, but then struggled after it.
Shares of Google parent Alphabet rallied about a week ahead of the split, which traded on a split-adjusted basis on July 18.
The stock split doesn’t appear to have been the catalyst some investors were hoping for. It didn’t help that snap (SNAP) – Get Snap Inc. Class A Report reported incredibly disappointing quarterly earnings that sent the stock down nearly 40% in a single session.
With Alphabet set to report earnings after Tuesday’s close, investors could be a little worried about a disappointing result.
We saw the stock fall prior to the event; it has been falling for each of the past two weeks and fell slightly on July 25. Let’s see what the chart tells us.
Trade Alphabet Stock Before Profit
Alphabet stock weekly chart.
Chart courtesy of TrendSpider.com
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Alphabet stock is near a critical support level that comes into play at $105. The 2022 low is just below this zone at $101.88 and right near the monthly VWAP reading.
As you can see on the chart above, Alphabet stock also made a series of higher lows, a bullish technical development. This is as stocks ride on uptrend support (blue line), although that level has since failed.
Additionally, there has been clear resistance near $120 while Alphabet is currently below all of its short- and intermediate-term moving averages.
The downside is pretty clear: $100-$105 is a must-have support.
If Alphabet stock falls below it, it loses the $105 breakout level, the 2022 low, the monthly VWAP measure and the psychologically relevant $100 level – which was also support in 2021.
That could open the door to the low $90s which was a previous breakout area and where the 200 week moving average comes into play.
I recognize that this level seems a bit far off and therefore unlikely. However, keep in mind that the quarter doesn’t have to be a disaster to disappoint investors.
While Alphabet has been one of the strongest tech stocks, that doesn’t mean it’s immune when earnings really stun investors — and when there’s a broader market pullback in the days and weeks ahead.
As for the uptrend, the bulls need Alphabet stock to surpass the 10-week moving average and bring $118-$120 into play, followed by $125.