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Alphabet Inc (GOOG) - March 4, 2024

Alphabet, Inc. (GOOG), parent of Google, has been one of the “Magnificent Seven” tech stocks and is one of the largest market cap companies on the planet. Its performance, however, has not been so magnificent lately, joining Tesla and Apple in falling off the bandwagon. Year to date, GOOG is down 2.0% while the S&P 100 Index is up 8.8% and the NASDAQ Composite Index is up 8.4%.

Alphabet’s weakening relative performance also appears in the relative strength rankings of the SIA S&P 100 Index Report. GOOG dropped out of the green zone in November but in December and January it had worked its way back up to the top of the Yellow Neutral Zone before rolling back down in February. On Friday, GOOG finished in 47th place, down 15 spots in the last month. In the SIA NASDAQ 100 Index Report, GOOG is in the Red Unfavored Zone in 59th position.

Candlestick Chart Indicates a Shift to Distribution:

A growing series of failures suggests that the accumulation trend in Alphabet (GOOG) shares which started in March of 2023 has ended and that the shares have been under distribution for the last month.

At the end of January, GOOG broke through its late 2021 peak and broke out over $150.00 to a new all-time high. A week later, the shares were knocked back under $150.00 and since then, there has been a series of lower highs in weekly candles, a sign that bears have gained the upper hand.

In mid-February, GOOG snapped an uptrend line and heading into March, GOOG has broken down below $140.00 on a jump in volume to confirm the start of a new downtrend. More troubling, last week’s decline came during a week when major US indices broke out to new all-time highs, a significant negative divergence.

Next potential downside support appears at previous lows near $130.00 then closer to the $125.00 round number. $140.00 reverses polarity to become initial resistance.

Point and Figure Chart Stages a Double Bottom Breakdown:

This 1% chart highlights the recent downturn in Alphabet (GOOG) shares. Back in January, the shares launched up out of a congestion zone to new all-time highs, clearing their November 2021 peak. Last month, however, the shares started to backslide and after a rebound attempt failed at a lower column high, the shares came under further distribution. More recently, the shares completed a bearish Double Bottom breakdown, which signaled the start of a new downtrend that has extended into March.

GOOG is currently sitting just above a recent low. A close below $136.95 would complete a pending spread double bottom pattern and confirm the start of a new downleg with next potential downside support at previous column lows near $130.30, or $122.75, or $125.25 based on a horizontal count and a round number. Initial resistance on a rebound appears near $143.95 based on a 3-box reversal.

With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 5 out of 10, GOOG is exhibiting short-term weakness against the asset classes.

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