Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) was sliding an additional 1% at one point to a new 52-week low Wednesday after a big bearish day on Tuesday saw the stock fall 5.32%.
A downturn in the general markets, amid a stubbornly tight labor market ahead of the Federal Reserve’s decision on interest rates had the markets spooked.
The CME FedWatch Tool puts odds at nearly 90% of the Fed raising rates by 75 basis points this afternoon for the fourth time in a row.
Read more about what one analyst sees ahead of the Fed’s meeting
Alphabet is also still suffering from a bearish reaction to its Oct. 25 worse-than-expected third-quarter earnings print, which caused the stock to close down almost 9.6% the following day.
Soaring inflation and rising interest rates could cut spending further in the lead-up to the holiday season, which could further negatively impact Google’s top and bottom lines during the fourth quarter as YouTube advertisement spending continues to decrease.
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.
The Alphabet (GOOG) Chart: Alphabet confirmed a new downtrend on Tuesday when the stock printed a lower low under the Oct. 27 low of $91.90. The most recent lower high within the trend was printed on the following day at $96.86.
On Tuesday, Alphabet printed a bearish engulfing candlestick, which indicated lower prices were likely to come on Wednesday. If the stock closes Wednesday’s session near its low-of-day, Alphabet will print a bearish Marubozu candlestick, which could indicate lower prices will come again on Thursday.
Eventually Alphabet will show signs that a bounce, at least to print its next lower high, is on the horizon. Traders can watch for the stock to print a reversal candlestick, such as a doji or hammer candlestick, to indicate a reversal.
A bounce is likely to come soon because Alphabet’s relative strength index (RSI) is measuring in at about 34%. When a stock’s RSI nears or reaches the 30% level it becomes oversold, which can be a buy signal for technical traders looking to scalp a bullish position.
Alphabet has resistance above at $94.82 and $97.79 and support below at $89.62 and $86.08.
