Key takeout
- Alphabet’s shares dropped 7% on Wednesday after Apple executives announced efforts to integrate AI-powered search features into the Safari browser.
- Stock levels have dipped below lower trendlines, suggesting a continuation of the downward trend as daily trading volume remains notably high.
- Investors should closely watch significant support levels around $141 and $131, while resistance levels are near $165 and $182.
Alphabet (GOOGL) experienced a decline in share price on Wednesday when it was reported that Apple (AAPL) is working on adding AI-driven search capabilities to its Safari browser.
These two tech companies have had a longstanding collaboration, with Alphabet generating about $20 billion annually from Google Pay, as Safari defaults to Google’s search engine. There’s a growing concern that AI could diminish Google’s dominant position in online searches, which is crucial for its revenue.
Since the beginning of the year, Alphabet’s stock has seen a roughly 20% decrease by the end of Wednesday. There are concerns that a slower economy might lead to a drop in advertising spending, further impacting revenue.
Let’s take a closer look at Alphabet’s stock chart and examine crucial price levels that could be important going forward.
Rising wedge failure
After a concerning “death cross” appeared in the charts last month, Alphabet established a rising wedge pattern followed by a counter trend rally.
This downward move seems to have kicked off during Wednesday’s trading. Prices fell below the low-pattern trendline amidst higher-than-average daily trading volume. Additionally, this decline coincided with a relative strength index (RSI) falling below the 50 mark, indicating increasing selling pressure.
Two major support zones are essential for monitoring on Alphabet’s chart, presenting key areas where the stock may find support during any potential recovery.
Key support levels to monitor
The first significant support level to observe is around $141. This point may attract buying interest, linking back to last month’s notable lows as well as several peaks that appeared in Q4 of 2023.
If the stock drops below this key level, it may find further support at $131. Investors could look for buying opportunities as the stock pulls back toward the 200-day moving average, a critical point that was closely watched last March.
Important overhead areas worth seeing
It’s advisable to keep an eye on the $165 region as the stock attempts to recover. This level could present overhead resistance, coinciding with the peak of the rising wedge pattern.
Potential movements around this area might lead up to $182. Investors who acquired Alphabet shares at lower prices could see opportunities for profits as the stock interacts with trendlines connecting various trading activities since late June of last year.
Comments, opinions, and analyses presented here are for informational purposes. Please read the Warranty and Liability Disclaimer for further information.
As of the date this article was written, the author does not hold any of the mentioned securities.
