GOOGL plummets $50.42 (-3.28%) after posting strong earnings
Alphabet Inc. (GOOGL) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
GOOGL ended the month 4.93% higher at 1487.95 after tanking $50.42 (-3.28%) today on high volume, notably underperforming the Nasdaq 100 (1.78%) following Thursday's earnings report. This is the biggest single-day loss in over a month. The last time we've seen such an unusually strong single-day loss on June 26th, GOOGL actually gained 2.54% on the following trading day. Today's close at 1487.95 marks the lowest recorded closing price since July 2nd. Closing below Thursday's low at 1495.17, the market confirmed its breakout through the prior session low after trading up to $41.03 below it intraday.
Daily Candlestick Chart (GOOGL as at Jul 31, 2020):
GOOGL reported earnings of $10.13 per share after Thursday's market close. With analysts having expected an EPS of $8.43, Alphabet Inc. topped 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 failing market expectations by -4.2%.
Friday's trading range has been $50.88 (3.4%), that's above the last trading month's daily average range of $37.38. 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 GOOGL.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading as low as 1454.14 during the day, Alphabet found support at the 50-day moving average at 1466.91. The share closed back below the 20-day moving average at 1521.25.
Although the stock is currently in a short-term downtrend, this might 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 Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Alphabet. Out of 144 times, GOOGL closed higher 51.39% 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 59.03% with an average market move of 0.72%.
With four out of the other four FAANG Stocks closing higher today, the ones that stand out on the positive side are AAPL gaining 10.47% and FB closing 8.17% higher. None of the markets ended the day in the red. Read more