Stock of the day: Alphabet

The first stock of this new week will be Alphabet. FYI it’s good old Google if you missed the fact that they rebranded some time ago. The post pandemic rise on Google was spectacular. For the first time though, we can see a bullish sign on the chart, which in this case is very interesting.

In the past few months, Alphabet was inside of a symmetric triangle formation (black). You could call it a pennant but it was created on the long-term chart and lasted more than three months, so it would be fairer to call it a triangle. The name for this pattern is not so important though. What’s important is that the last week, we witnessed a breakout to the downside, which gave us a proper sell signal. The candle breaking the triangle support was ugly too, which is another egg to the seller’s basket.

How deep we can go? Well, the first target was already reached. This is the green uptrend line connecting higher lows since September 2020. In case that’s not enough, we have the red line, which is the main uptrend line connecting the most important post-pandemic lows. Tech stocks don’t perform particularly well at the beginning of the year, so when the green support fails, chances to get to the red support will rise significantly.