Monitor These Alphabet Price Points as Stock Surges Following Strong Earnings Report

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Key Takeaways

Alphabet’s stock experienced an upswing on Friday following the release of quarterly results that exceeded analysts’ expectations, largely driven by growth in search advertising fueled by AI advancements. The stock broke through the upper trendline of a descending channel in Thursday’s trading, setting a favorable ground for today’s earnings-driven rally. Investors should pay close attention to significant resistance levels at approximately $168, $182, and $196, with a notable support level situated around $155.

Alphabet Inc. (GOOGL) saw its shares increase on Friday after the company’s latest quarterly earnings surpassed Wall Street forecasts, thanks to a surge in search advertising influenced by artificial intelligence advancements.

The tech behemoth announced an increase in its quarterly dividend and expanded its stock repurchase program. They credited AI enhancements in Google search for the robust advertising growth, mentioning features such as AI Overview that have significantly boosted user interaction. Alphabet reaffirmed its commitment to allocate $75 billion for capital expenditures this year, most of which is earmarked for enhancing its AI infrastructure.

As of late trading, Alphabet shares rose by 1.8% to around $162, following a series of analysts adjusting their price targets upward after the positive earnings report. However, despite this recent uptick, the stock is down 15% since the beginning of the year, primarily due to concerns about whether the company’s substantial investments in AI infrastructure will prove fruitful.

In the following sections, we will delve into the technical analysis of Alphabet’s chart and highlight key price levels that investors should watch closely.

Descending Channel Breakout

Throughout much of the year, Alphabet shares have been fluctuating within a descending channel, with the 50-day moving average recently dipping below the 200-day moving average, creating a concerning “death cross” pattern, typically indicative of declining prices.

Nevertheless, the shares accomplished a breakout above the upper trendline of this pattern during Thursday’s trading session, positioning the stock for the positive movement seen today.

The relative strength index (RSI) currently reflects a neutral stance, remaining significantly below overbought thresholds, which suggests there is potential for further growth.

We will now pinpoint three vital overhead levels on Alphabet’s chart where selling pressures may arise, along with identifying a key support level that warrants attention during any pullbacks.

Crucial Overhead Areas to Monitor

The first pivotal area to keep an eye on is $168, which could act as overhead resistance corresponding to a trendline that connects several peaks and troughs dating back to late July of the previous year.

Should the stock break above this mark, it might ascend to around $182, where selling pressure could emerge near last November’s swing high, coinciding with the opening price of a stock gap from early December.

The next significant resistance level is pegged at $196. Investors who acquired shares at lower prices may consider cashing in on profits in this range, which aligns with the upper end of a consolidation phase observed during most of December and January.

Critical Support Level Worth Watching

On the downside, a decline in buying momentum could trigger a pullback toward the $155 mark. This level is significant as it coincides with the breakout point from yesterday’s trading and aligns with the swing low observed in early August 2024.

The views and analyses presented in this article are meant for informational purposes only and should not be construed as financial advice.

As of the time of this writing, the author does not hold any shares of the mentioned securities.

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