Last week, Google stock broke down below its long-term 200-day moving average. And those losses continue this week, as Alphabet hit its lowest level since March and has arguably the worst stock chart among the Magnificent Seven.
Early Tuesday, the European Union's top court upheld a penalty of nearly $2.7 billion after the EU said that Google had abused "its dominant position by favoring its own comparison shopping service."
Google Stock Hits Sell Signal
On July 24, Google stock breached its 50-day line in heavy volume, triggering the first sell signal, after the company's second-quarter results sparked heavy selling.
The search giant reported second-quarter earnings and revenue that topped consensus estimates. The internet search advertising business and cloud computing unit topped expectations but YouTube missed estimates. In addition, Google management signaled higher expenses in the September quarter, possibly curtailing margin growth.
Google shares continued to weaken in early August amid the broader stock market sell-off. Additionally, investors worry that the U.S. Justice Department is mulling a breakup of the company following a recent antitrust court victory against the internet giant.
A federal judge on Aug. 5 ruled that Google violated antitrust laws by engaging in unfair business tactics to dominate the internet search advertising market. Alphabet's $20 billion in annual payments to Apple, which makes Google the default search engine on its iPhones, were a central part of the government's case.
Forget Amazon And Tesla. This Non-Magnificent Seven Stock Is Soaring.
Mag 7 Stock Hits Lowest Level Since March
Last week, Alphabet tumbled nearly 8%, breaking its long-term 200-day moving average. That's another sell signal. When the stock breaches the moving average in strong volume, that is a better indicator of a downward trend. (This is true of Alphabet's class A shares that trade under the GOOGL symbol and the class C shares with the GOOG ticker.)
Shares added to those losses Monday, declining another 1.5% in above-average volume. Looking back to July 24, there are a number of instances of heavy-volume declines, per IBD MarketSurge chart analysis.
As such, the Accumulation/Distribution Rating has worsened to an E, while the up/down volume ratio has deteriorated to 0.6. Further, the relative strength line is in a steep downtrend, indicating big underperformance vs. the broad market. And the Relative Strength Rating has declined to a woeful 37.
Google stock moved up 0.4% midday Tuesday.
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