Alphabet Inc. traded in a descending triangle formation, made up of lower highs and equal lows, for almost two years (dashed lines). The rise above the top of this pattern signalled a surge in investor demand and the start of a new up-leg (A). Alphabet then became over-bought and pulled back toward its 40-week moving average (40wMA – B) but, despite the recent market sell-off, it continues to trade above its rising average and trend-line. A move above $650 (U.S.) would suggest the stock is ready to resume the up-trend and a rise above $680 would confirm it. Only a decline below $550-$570 would be negative. Measurements provide a target of $750.
Monica Rizk is the senior technical analyst and Ron Meisels is the president of Phases & Cycles Inc. and he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: http://www.decisionplus.com/.