GOOGL dominated by bears dragging the market lower throughout the day
Alphabet Inc. (GOOGL) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
GOOGL finished Wednesday at 1512.09 losing $23.03 (-1.5%) 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 1522.10, the share confirmed its breakout through the prior session low after trading up to $10.51 below it intraday.
Daily Candlestick Chart (GOOGL as at Sep 16, 2020):
Wednesday's trading range has been $42.14 (2.73%), that's slightly below the last trading month's daily average range of $43.23. 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 GOOGL.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on September 3rd, GOOGL lost -2.96% on the following trading day.
Prices are trading close to the key technical support level at 1485.93 (S1). Prices broke below the key technical support level at 1534.46 (now R1), which is likely to act as resistance going forward. The market ran into sellers again today around 1553.73 for the third trading day in a row after having found sellers at 1550.99 in the previous session and at 1557.00 two days ago.
Though 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.
Selling could accelerate should prices move below the close-by swing low at 1493.02 where further sell stops might get triggered. Further selling could move prices lower should the market test August's nearby low at 1464.03.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Alphabet. Out of 422 times, GOOGL closed higher 55.92% 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 61.85% with an average market move of 1.33%.
With four out of the other four FAANG Stocks closing lower today, the ones that stand out on the negative side are FB losing -3.27% and AAPL closing -2.95% lower. None of the markets managed to end the day in the green. Read more