Key takes
Alphabet (GOOGL, GOOG) stocks fell sharply as cloud revenues, weaker than expected, obscured four quarter revenues prior to analyst estimates.
Google’s parents also hope to invest around $75 billion in capital expenditure in 2025, saying Lion’s share is directed towards expanding its artificial intelligence infrastructure. The number was higher than expected analysts, highlighting investors’ concerns about when spending will be rewarded.
The forecast came last week after the emergence of sophisticated, cost-effective AI models from Chinese startup DeepSeek, bringing the spotlight to the significant investments made by the US tech giant in emerging AI technology.
Alphabet’s stock fell nearly 8% at around $190 in late trading. Despite today’s decline, the stock has risen 33% over the past 12 months, surpassing the S&P 500 at an affordable price during the period.
Below we will classify the technology on Alphabet’s charts and identify key price levels that are worth watching.
Focus on the ascending channel
Alphabet stocks traded on a narrow seven-week upward channel before surpassing the pattern later last month. Prices continue to gain momentum ahead of Tech Giant’s quarterly report, with the Relative Strength Index (RSI) recently exceeding the 60 threshold.
But a day after setting record highs, the weaker than expected cloud results destroyed the bullish price action on the stock, setting a stage of abrupt reversal.
It also identifies four key support levels for viewing amid a revenue-driven sales potential, and points out important overhead areas for monitoring whether inventory resumes long-term uptrends let’s.
Important support levels to keep an eye on
First, it’s worth looking at how the price of a stock responds to the $190 level. This area on the chart finds the confluence of support from the low trend line of the upward channel and the 50-day moving average.
The stock could drop to around $180 as it failed to follow this level of the Bulls. This could attract purchase rights near Peaks in May, October and November 2024.
If you sell below this level, you can drop to the $168 level. Investors can search for entry points for the region near trendlines linking various peaks and troughs on the charts between July and November last year.
A deeper revision of the stock will revive the $160 level. The area may provide support near the horizon that connects a series of comparable price ranges to charts from April to October.
The location also has downward movement of inventory from July to September, and is largely consistent with the negative side targets of the predicted bar pattern that will be relocated from the end of Tuesday. Interestingly, the move follows a failed break from the upward channel, which could provide clues as to how future revisions from similar setups will unfold.
Key Overhead Area Monitor
During recovery efforts, investors will need to track the $201 area. Investors who have bought stocks at low prices may want to close their profits near the upward trend line of the upward channel, which is currently just below the stock’s record highs.
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As of the date this article was written, the author does not own the above securities.
