WWM - Analytics

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    Today’s Trading Edge: Google Parent shares pare gains after taking Apple’s spot as most valuable company

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    Google parent Alphabet Inc. (GOOGL) shares rallied as high as $810.35 but settled the day only up 1.32% at $780.91. The shares opened strongly following yesterday’s earnings beat. The company reported fourth quarter net income of $8.67 a share, much higher than the analyst consensus of $8.17 a share. Revenue also beat with $17.3 billion in sales, stronger than the expected $16.9 billion. Alphabet Inc also overtook Apple’s spot as the most valuable company.    

    Price action on the Alphabet Inc daily chart shows that Tuesday’s rally was unable to close above the psychological $800 handle. The bullish move may still have further momentum if we see price make fresh record highs over the next trading week. If we see price consolidate here, major support will come from the 50-day SMA which currently trades around $758 level. Deeper support could come from the $727 region.

    If we see the bullish move continue, further upside may target the $845-$867 region. It is around that area we could see price form a bearish ABCD pattern. Point D is targeted with either the 141.4% or 161.8% Fibonacci expansion levels.        

    The Trade: Buy GOOGL at $775, with a stop loss at $750 and a take profit at $850.  The Risk/Reward Ratio is 1:3


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