Could Alphabet Inc surge 11% higher from key support?

Januar 08, 2021 13:00

Technology stocks have taken a beating in recent weeks as investors favoured value stocks instead of growth stocks. However, the sector rotation that has taken place is now seeing signs of a turn with new lockdown restrictions and vaccine rollout concerns forcing investors to move back into tech. 

Alphabet Inc, the owner of Google, is showing some interesting technical levels on its share price. Over the past few weeks, the company’s stock price has struggled to break through two key levels of support, shown on the daily chart below: 

Source: Admiral Markets MetaTrader 5, #GOOG, Daily - Data range: from Apr 9, 2020, to Jan 8, 2021, performed on Jan 8, 2021, at 8:30 am GMT. Please note: Past performance is not a reliable indicator of future results. Last five-year performance: 2020 = +7.89%, 2019 = -5.27%, 2018 = -2.11%, 2017 = +1.48%, 2016 = -3.97%, 2015 = +6.28%. 

 

The first support level is shown by the black horizontal line. This was created by the swing high at 1,717.99 during August 2020 which caused a temporary sell-off. When the price came back up and broke through it, the price level became a support level with more than four bounces to the upside since. 

The second support level is the 50-period exponential moving average (red line). Moving averages are widely used in trending markets and currently confirm the trend is up with the 50-period, 100-period (green line) and 200-period (blue line) all pushing higher. 

This week price bounced off both of these support levels for a potential move upwards. Traders will now be looking for additional signs of whether the market will continue its push higher, such as drilling to lower timeframes and viewing cycle formations. 

If price can continue, traders may look to the 1,1888.00 price level, which is the 1.272 Fibonacci Extension from the 3 December 2020 swing high to the 21 December swing low, representing a near 11% push higher from December lows.  

According to BarChart, there has been a huge shift in bullish analyst ratings for Alphabet stock, as shown below:

Source: BarChart, January 8, 2021

 

Did you know that you can use the Trading Central Technical Ideas Lookup indicator to find actionable trading ideas on this index and thousands of other instruments across Forex, stocks, indices, commodities and more?

You can get this indicator completely FREE by upgrading your MetaTrader 5 trading platform provided by Admiral Markets UK Ltd to the exclusive Admiral Markets Supreme Edition! You’ll also receive a whole range of advanced trading tools such as correlation and sentiment indicators!

Start your free download by clicking on the banner below:

INFORMATION ABOUT ANALYTICAL MATERIALS:

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

1.This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

2.Any investment decision is made by each client alone whereas Admiral Markets UK Ltd (Admiral Markets) shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.

3.With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.

4.The Analysis is prepared by an independent analyst Jitan Solanki, Freelance Contributor (hereinafter "Author") based on personal estimations.

5.Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.

6.Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.

7.Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.

Avatar-Admirals
Admirals Eine Komplettlösung für das Bezahlen, Investieren und Verwalten Ihres Geldes

Admirals ist mehr als ein Broker. Wir sind der Dreh-und Angelpunkt für Ihre Finanzen, indem wir Ihnen eine breite Palette von Finanzprodukten und -dienstleistungen anbieten. Wir machen es möglich, persönliche Finanzen durch eine Komplettlösung für das Investieren, Ausgeben und Verwalten von Geld anzugehen.