Alphabet (GOOGL) Stock Chart Analysis Following Earnings Release

Earlier this week, we highlighted the prevailing bullish sentiment in the market ahead of Alphabet’s (GOOGL) earnings report, noting that:
→ an ascending channel had formed;
→ the psychological resistance level at $200 was of particular importance.

The earnings release confirmed the market’s optimism, as the company reported better-than-expected profits, driven by strong performance in both its advertising and cloud segments.

In his statement, CEO Sundar Pichai noted that AI is positively impacting all areas of the business, delivering strong momentum.

The company is expected to allocate $75 billion this year to expand its AI capabilities.

As a result, Alphabet (GOOGL) opened yesterday’s trading session with a bullish gap (as indicated by the arrow). However, as the session progressed, the price declined significantly, fully closing the gap.

This suggests that:
→ the bulls failed to consolidate their gains, allowing the bears to seize the initiative;
→ the ascending channel remains valid, with yesterday’s peak testing its upper boundary;
→ such price action near the $200 level reinforces expectations that this psychological mark will continue to act as resistance.

It is possible that the positive sentiment following the earnings report may weaken in the near term. Accordingly, traders may consider a scenario in which Alphabet’s (GOOGL) share price retraces deeper into the existing ascending channel. In this case, the former resistance levels at $180 and $184 may serve as a support zone.

Buy and sell stocks of the world's biggest publicly-listed companies with CFDs on FXOpen’s trading platform. Open your FXOpen account now or learn more about trading share CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.