GOOG runs into sellers around 1562.00 for the third day in a row
Alphabet Inc. (GOOG) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
GOOG finished Wednesday at 1520.90 losing $20.54 (-1.33%) on low volume, but still slightly outperforming the Nasdaq 100 (-1.67%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 1531.83, the stock confirmed its breakout through the previous session low after trading up to $12.01 below it intraday.
Daily Candlestick Chart (GOOG as at Sep 16, 2020):
Wednesday's trading range has been $42.18 (2.71%), that's slightly below the last trading month's daily average range of $45.24. Weekly volatility is also lower, being below 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. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on September 3rd, GOOG lost -3.09% on the following trading day.
Prices are trading close to the key technical support level at 1497.36 (S1). Prices broke below the key technical support level at 1540.97 (now R1), which is likely to act as resistance going forward. The market ran into sellers again today around 1562.00 for the third trading day in a row after having found sellers at 1559.57 in the prior session and at 1564.00 two days ago.
While the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the nearby swing low at 1497.36 where further sell stops could get activated. Further selling might move prices lower should the market test August's close-by low at 1458.65.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Alphabet. Out of 643 times, GOOG closed higher 55.05% 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 61.74% with an average market move of 1.10%.