GOOG tumbles $48.49 (-3.17%) after posting strong earnings
Alphabet Inc. (GOOG) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
GOOG finished the month 4.91% higher at 1482.96 after tanking $48.49 (-3.17%) today on high volume, strongly underperforming the Nasdaq 100 (1.78%) following Thursday's earnings report. Today's close at 1482.96 marks the lowest recorded closing price since July 2nd. Closing below Thursday's low at 1492.22, the share confirmed its breakout through the prior session low after trading up to $38.18 below it intraday.
Daily Candlestick Chart (GOOG as at Jul 31, 2020):
GOOG reported earnings of $10.13 per share after Thursday's market close. With analysts having expected an EPS of $8.43, Alphabet Inc. surpassed market expectations by 20.2%. The company's last earnings report was released on April 28, 2020, when Alphabet Inc. reported earnings of $9.87 per share missing market expectations by -4.2%.
Friday's trading range has been $54.91 (3.65%), that's far above the last trading month's daily average range of $38.87. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GOOG.
After trading as low as 1454.04 during the day, the stock found support at the 50-day moving average at 1465.51. Alphabet closed back below the 20-day moving average at 1519.79. When this moving average was crossed below the last time on Tuesday, GOOG actually gained 1.45% on the following trading day.
Although the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. While it is usually interpreted as neutral, it has actually shown to be bearish for Alphabet. Out of 3 times, GOOG closed lower 66.67% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 66.67% with an average market move of -1.74%.