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Alphabet (GOOGL) Stock Chart Analysis As Quarterly Earnings Report Looms

ByMelanie Schaffer

Jul 26, 2022
Alphabet (GOOGL) Stock Chart Analysis As Quarterly Earnings Report Looms


Alphabet, Inc GOOG GOOGL will print its second-quarter earnings after the bell on Tuesday. The stock was falling over 2% lower heading into the event and has dropped almost 7% since starting to trade on a 20-1 split adjust basis on July 18.

In the trading session following Google’s rare first-quarter earnings miss, the stock gapped down over 6% but shot up 4.41% on the subsequent day. For that quarter, Alphabet reported EPS of $24.62, missing the $26.11 estimate and sales of $68.01 billion, which slightly beat the $68.00 billion estimate.

For the second quarter, the consensus estimate for Google’s earnings per share comes in at $1.31 on revenues of $70.35 billion.

KeyBanc Capital Markets’ analyst Justin Patterson cut the price target for Alphabet on Tuesday from $153.75 to $125.

Traders will be watching closely to see how Alphabet reacts in the after-market trading session. Holding a position in a stock over earnings, especially for options traders who must consider “premium burn,” is risky because a stock can drop following an earnings beat and rise following a loss.

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The Alphabet Chart: On Tuesday, Alphabet broke bearishly down from a rising channel pattern, which the stock had been trading in since May 25. When a stock breaks down from a rising channel it can indicate a longer-term downtrend is on the horizon, but due to Alphabet’s earnings print coming up after the bell and the fact that the drop came on lower-than-average volume, there’s a chance the stock could rebound.

  • The fall confirmed Alphabet is trading in a downtrend, with the most recent lower high printed on July 20 and $116.33 and the most recent confirmed lower low formed at the $109.30 mark on July 13. On Monday, Alphabet confirmed the trend was intact by falling under the most recent lower low.
  • Eventually, Alphabet will bounce up to print, at least, another lower high. Traders and investors can watch for the stock to print a reversal candlestick, such as a doji or hammer candlestick, which could indicate the bounce is on the way.
  • If Alphabet suffers a bearish reaction to its earnings print, there’s a gap that still exists between $97.79 and $100.10 that is likely to fill. The gap was left behind on Feb. 3, 2021.
  • Bullish traders would like to see Alphabet jump back up into the rising channel following its earnings print, which could indicate Tuesday’s bearish price action was a bear trap. 
  • Alphabet has resistance above at $106.53 and $111.50 and support below at $101.88 and $97.79.

See Also: Fear Among Investors Increases Slightly Ahead Of Big Earnings, Fed Decision


Image and article originally from www.benzinga.com. Read the original article here.