Will Alphabet Feel The Heat Of Weak Earnings?
JFD Team | Apr 27, 2022 07:38AM ET
Google parent Alphabet (NASDAQ:GOOGL) traded slightly lower yesterday but managed to stay above the key support zone of 2380, which has been providing support for the last few days. That said, after the closing bell yesterday, the tech giant reported weaker-than-expected earnings and revenue for the first quarter of 2022, with the stock sliding about 3% in extended trading.
Therefore, we expect to see a negative gap at today’s open, below 2380. This, combined with the fact that the stock is trading below a downside line drawn from the high of Apr. 4, paints a negative short-term picture.
A potential 3% negative gap would also take the stock below the 2340 zone, marked by the low of May 21, 2021, the break of which could carry extensions towards the low of May 19, at 2265, or the low of May 12, at 2230.
If there are no buyers near that zone either, we may experience larger bearish extensions, perhaps towards the 2125 area, which acted as a key resistance between March 5 and 16.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near its 30 line, while the MACD, although below both its zero and trigger lines, shows signs of bottoming. Both indicators detect slowing downside speed and support a slight bounce before the next negative leg.
However, given that the stock already slid yesterday in extended trading, we will not emphasize those two indicators for now. To start examining the case of a decent upside correction, we would like to see a clear rebound back above 2530, a territory that provided strong support between Jan. 24 and Apr. 18.
This could also confirm the break above the aforementioned downside line and may allow advances towards the high of April 20th, at 2640. If participants are not willing to stop there either, we could see them climbing towards 2685 or 2735 areas, marked by the highs of Mar. 11 and 3, respectively.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.