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$GOOG – Google results by SchalkLouw on TradingView.com

After disappointing earnings results last night, Alphabet Inc ( GOOG ) lost 7.7% of its value and again struggling today (-2%). They say a picture say a thousand words, and this one is no different. With a possible inverse head and shoulders developing, a bounce could possibly drive the share price higher, but I must admit, the risk seems to me to be on the downside.

We already saw a break and close below the 50-day moving average resistance level ($1189), with the 200-day moving average ($1140) being the most likely next resistance. $GOOG was trading at extreme overbought levels, which just again show that when a share is price to perfection (high/expensive P/E’s), they should get it right all the time, otherwise the punishment could be severe.

A breakthrough the 200-day moving average, could see us test the $1080 levels. I will monitor the major diagonal trendline closely, with major resistance currently around the $1020. Last mentioned will be my stop-loss levels if you’re a trader with a short-term long position.

Thomson Reuters consensus still have a target price of $1340 on the share, but after last nights miss, I recon we could see that figure being revised downward. Still believe got some great long-term possibilities, but will personally wait for better levels.

Schalk Louw
As Portfolio Manager at PSG Wealth Old Oak and with over 20 years’ experience in the investment industry, Schalk has consistently delivered solid returns to his clients and has certainly become one of South Africa’s most well-known strategists. He started his career in 1994 at the stockbroking company, Huysamer Stals (later ABN Amro). He joined SMK Securities in 1997, (later became BoE Personal Stockbrokers) and was later appointed as director and branch manager. In 2001 he co-founded Contego Asset Management and managed the company as CEO up to March 2014, after which he joined PSG Wealth Old Oak. Schalk has also become a regular household name with investors, with his reports being published in many of the national press. He completed his MBA in 2008.

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