Don't Ignore This Chart!

Alphabet Fails at Key Moving Average and Underperforms

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Alphabet (GOOGL) is weighing on the Nasdaq 100 ETF as it fails at the 50-day simple moving average and the price relative breaks down. The six month candlestick chart shows GOOGL surging to 800 after earnings and then immediately falling back below 700 in early February. The stock market got a strong bounce the next few weeks, but Alphabet's bounce was rather feeble as the stock barely made it back above its 50-day SMA. A rising wedge formed during this bounce and GOOLG broke wedge support with a sharp downturn the last four days. The stock has failed at the 50-day and the wedge break signals a continuation of the early February decline. 


The indicator window shows the price relative (GOOGL:SPY ratio) breaking down last week as GOOGL underperforms the broader market. Note that this ratio peaked in early February and fell to its lowest level since late October.

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--Arthur Hill CMT

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Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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