Chart of the Day: Google’s Correction Seems Finished
The giant search and AI company had a nasty pullback but seems to have found its footing.
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As the excitement of the SpaceX (SPCX) IPO flooded the airwaves of financial media, some of the more prominent companies were taking a backseat. Count Alphabet (GOOGL) as one of those names.
Alphabet underwent a modest corrective period that saw the stock shed about 14% in a month, a rather normal-sized pullback for this company. Recent technical trends seem to signal that corrective period is behind us and now might be a good spot to start adding more shares (if you’re light in your portfolio).
There is nothing wrong with a corrective move. It allows those on the sidelines to enter and offers dip buyers a chance to add shares.
Alphabet’s chart was overbought for quite awhile, from April through May, and was due for some consolidation. Given the size and notoriety of Alphabet any corrective move was going to feel bad and give pause to the investor, but looking at the technical view we can understand why this was needed and how a pullback often leads to bigger gains ahead.
Even the pullback in February/March of this year, much larger than the current pullback, yielded massive gains. Currently, the MACD is nearly on a bullish crossover move while stochastics are turning up. We also find relative strength with a bullish divergence (pane 3) and breaking a downtrend line.
We see new all-time highs coming sooner rather than later.
We like Alphabet in TheStreet Pro Portfolio and rate it a Two, or “stockpile on pullbacks.”
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At the time of publication, TheStreet Pro Portfolio was long GOOGL.
