Chart of the Day: Shhhh… Alphabet Is Taking a Nap
A quiet period after a volatile move is often seen as a positive development. In the technical analysis world, we call that consolidation, where buyers and sellers decide where the best price is to be discovered in a very tight range.
Take a look at the last 6-8 daily price bars on Alphabet ($GOOGL), there is no trend and no defining price action. There is very little edge on either side of the market other than saying you could argue bearish due to the purple candles.
Momemtum is non-existent, the stochastics are on the floor. I suppose eventually the stock will gain some momentum, but who knows when? Money flow is starting to improve, and that is our green shoot.
Recent volume trends have been neutral; look at the volume bars and you’ll see just how little turnover has been issued. No price movement, no volume and there is a tight range.
Now, we can look at this from a bullish or bearish perspective. The bulls would say the price is holding and there is a coiled spring being created that will eventually push out to the upside, since this consolidation is in the upper end of the chart. Bears would say the price is still bearish and the onus is on the bulls to prove the sellers are not finished.
Interesting battle we have here!
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.
