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As the chart shows, during yesterday’s trading session, the stock price of Alphabet Inc. (GOOGL), the parent company of Google, declined by more than 4.5%. The drop was driven by regulatory pressure on the company concerning its Chrome browser, which may face a forced sale or breakup.
The US Department of Justice believes Google should end its monopoly on online search. A court case is scheduled for April next year, but the sharp decline in GOOGL’s share price reflects growing investor caution.
The technical chart for Alphabet Inc. shares reveals further reasons for concern due to several bearish indicators:
→ The price reversed downward (indicated by an arrow) from the median line of the long-term channel (shown in blue).
→ All bullish progress made following the earnings report (as analysed in our 30 October coverage of GOOGL shares) has now been lost.
→ The price has broken below the boundary of the steep ascending channel, which had been in place since early September, increasing the risk of a breach of the lower boundary of the blue long-term channel.
Currently, the price is holding support at the former resistance level of $167. However, will it be strong enough to counter the bearish momentum triggered by these developments?
Analysts Remain Optimistic
Despite recent turbulence, analysts maintain a positive outlook. According to a TipRanks survey:
→ 27 out of 34 analysts recommend buying GOOGL shares.
→ The average 12-month price target for GOOGL is $208.
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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.
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