GOOG breaks back below 20-day moving average
Alphabet Inc. (GOOG) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
GOOG ended the week -5.29% lower at 1036.58 after losing $32.15 (-3.01%) today, but still slightly outperforming the Nasdaq 100 (-3.3%) following today's NFP report. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GOOG as at Dec 07, 2018):
Friday's trading range has been $46.76 (4.41%), that's far above the last trading month's daily average range of $28.82. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GOOG.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on October 17th, GOOG lost -2.48% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 1028.50 earlier during the day, Alphabet bounced off the key technical support level at 1035.76 (S1). The failure to close below the support could increase that levels significance as support going forward. The market closed back below the 20-day moving average at 1056.24. After having been unable to move lower than 1030.77 in the prior session, the share found buyers again around the same price level today at 1028.50.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 980.64, downside momentum might speed up should the stock break out to new lows for the year. Trading close to October's low at 995.83 we could see further downside momentum if potential sell stops at the level get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Alphabet. Out of 485 times, GOOG closed higher 54.43% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 59.38% with an average market move of 1.17%.