Alphabet Lost Momentum After Missing Q4 Earnings

quarter of 2018. The stock set its all-time intraday high of $1,198.00 on Jan. 29, then gapped lower following a negative reaction to earnings released after the closing bell on Thursday, Feb. 1. Back then, Alphabet was a strong momentum stock and was showing characteristics of an “inflating parabolic bubble” on its weekly chart.

The parabolic bubble popped, and on Feb. 9, the stock tested its 200-day simple moving average of $1,003.38, down 16% from the high and into correction territory. Shares of Alphabet rallied from the 200-day simple moving average and traded as high as $1,178.16 on March 12, up 17%. This rally “filled the price gap” to the Feb. 1 low of $1,169.36. (See also: Alphabet’s Stock Price May See a Sharp Rebound.)

The overall technology bubble popped as the Nasdaq Composite set its all-time intraday high of 7,637.27 on March 13. This day turned out to be a daily “key reversal” as the Nasdaq closed March 13 below the March 12 low.

Alphabet stock joined the tech correction, declining below its 200-day simple moving average and setting a new 2018 low of $984.00 on March 28, down 16% once again. This was a trading opportunity to buy the stock at my semiannual value level of $987.07. Alphabet shares closed March at $1,037.14, down 1.5% year to date and in correction territory at 13.4% below the all-time high of $1,198.00 set on Jan. 29. The stock is 5.4% above its March 28 low.

In recent company news, Alphabet’s self-driving car unit Waymo recently announced a deal with Jaguar Land Rover to expand its autonomous ride-hailing program. The company is also commercializing its artificial intelligence DeepMind business four years after acquiring this business unit. (For more, see: How Artificial Intelligence Will Boost These 8 Stocks.)


Alphabet shares gapped lower on Feb. 2. The internet giant has an elevated P/E ratio of 57.75 as the stock swoons. …read more

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Category: GOOGL

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