Google parent Alphabet Inc. (NASDAQ: GOOGL) traded slightly lower yesterday, but managed to stay above the key support zone of 2380, which has been providing support the last few days. That said, after the closing bell yesterday, the tech giant reported weaker-than-expected earnings and revenue for the first quarter of 2022, with the stock sliding about 3% in extended trading. Therefore, we expect to see a negative gap at today’s open, below 2380. This, combined with the fact that the stock is trading below a downside line drawn from the high of April 4th, paints a negative short-term picture.
A potential 3% negative gap would also take the stock below the 2340 zone, which is marked by the low of May 21st, 2021, the break of which could carry extensions towards the low of May 19th, at 2265, or the low of May 12th, at 2230. If there are no buyers to be found near that zone either, then we may experience larger bearish extensions, perhaps towards the 2125 area, which acted as a key resistance between March 5th and 16th.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near its 30 line, while the MACD, although below both its zero and trigger lines, shows signs of bottoming. Both indicators detect slowing downside speed and support a small bounce before the next negative leg. However, given that the stock has already slid yesterday in extended trading, we will not put any emphasis on those two indicators for now.
In order to start examining the case of a decent upside correction, we would like to see a clear rebound back above 2530, a territory which provided strong support between January 24th and April 18th. This could also confirm the break above the aforementioned downside line and may allow advances towards the high of April 20th, at 2640. If participants are not willing to stop there either, then we could see them climbing towards the 2685, or 2735 areas, marked by the highs of March 11th and 3rd, respectively.
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