Chart of the Day: Alphabet Still Not Making the Grade
A downtrend persists on higher turnover as we wait for a bottom to be formed.
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Alphabet GOOGL is one of the Magnificent Seven stocks that continues to underperform. We could see a potential bearish move developing back in early February following a big miss on GOOGL's quarterly earnings. The stock was hit hard on very strong volume, which says large institutions were heavily selling GOOGL. At the time, the stock was simply testing the lower bounds of an uptrend channel (drawn in) so we did not see the need to panic, but it was not far after the stock fell through the channel and confirmed the downtrend.
Currently, Alphabet shows purple/pink candles, which is bearish on the GoNoGo composite of indicators. How strong is the trend? Check out the Average Directional Index in the fourth pane, which tells us how powerful this downtrend has been. Notice the acceleration to the low 40s, which is very strong and persistent. No wonder Alphabet is down 10% for the year and 20% off the highs.
Other indicators remain bearish, including the Moving Average Convergence Divergence (in the second pane), the Chaikin money flow (bottom pane) and parabolic Stop and Reverse (the dots in the top pane).
We would like to see the $155-160 area hold firm for a while, perhaps a month or so as the big money sees value following the recent slide.
We still like Alphabet in TheStreetPro Portfolio and rate it a "One," buy at anytime.
