Investors in Google-parent Alphabet may be experiencing a sense of deja vu in the wake of the company's fourth-quarter results on Jan. 30. The reason: Google stock has triggered two sell signals since then.
The "Magnificent Seven" stock rallied to 153.78 after breaking out at a buy point of 139.42 in a cup with handle ahead of earnings. But IBD MarketSurge chart analysis shows that the stock gapped down after results.
Shares then formed a flat base only to fall sharply and close 4% below the 10-week moving average last week. That drove Google stock below the earlier handle buy point of 139.42. That is a loss of 10.3% and triggered the round-trip sell rule.
Shares were down another 3% on Monday and are trying to hold support at the 200-day moving average. But the stock has undercut its more recent flat base on a weekly chart.
Google Stock: Ratings Weaken
Meanwhile Google's Relative Strength Rating dropped steadily to 73 from 91 six months back. That shows the stock is outperforming fewer stocks in the Investors' Business Daily database.
The Google stock chart also is showing other signs of weakening. The relative strength line took a plunge and continues to fall after shares gapped down on earnings on Jan. 31.
Fourth-quarter sales of $95 billion rose 10% while earnings per share of $1.93 climbed 18% from the prior-year quarter. Meanwhile, the search giant faces increasing competition from OpenAI, in which Microsoft has a big stake. Microsoft has added OpenAI-developed search capability into its Bing search engine.
Please follow VRamakrishnan on X/Twitter for more news on the stock market today.
