Goodbye Google? Alphabet Drops But Will This Trend Remain A Friend To The Bulls?

Shares of Alphabet, Inc GOOG GOOGL gapped down to start Monday’s session following a report Samsung Electronics may ditch Google as the default search engine on its devices.

Samsung is weighing using Microsoft’s Bing search service instead, which has gained traction due to its addition of OpenAI's technology. If Samsung follows through on the decision, it could cost Google about $3 billion in annual revenue.

Alphabet’s negative reaction to the news wasn’t enough to negate the stock’s uptrend, which it has been trading in since Feb. 24, although bullish traders will want to see Google hold above the eight-day exponential moving average (EMA).

An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.

The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods.

Traders can use moving averages to help identify an uptrend, with rising lower time frame moving averages (such as the eight-day or 21-day EMAs) indicating the stock is in a steep shorter-term uptrend.

Rising longer-term moving averages (such as the 200-day simple moving average (SMA)) indicate a long-term uptrend.

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The Alphabet Chart (GOOG): Google’s most recent higher high within its uptrend was formed on Friday at $109.58 and the most recent higher low was printed at the $104.97 mark on April 4. When Google printed its higher high, the stock also formed a bearish double top pattern at that level, which indicated Google may retrace.

• On Monday, Google looked to be printing an inverted hammer candlestick, which suggests the stock may rebound on Tuesday. If that happens, the stock is likely to regain the eight-day EMA, which would give bullish traders more confidence going forward.
• Bearish traders want to see increasing bearish volume come in to drop the stock under $104, which would negate the uptrend and cause a possible downtrend to form. If that happens, Google may continue lower to back test the 200-day SMA as support.
• Google has resistance above at $106.53 and $111.50 and support below at $101.08 and $97.79.

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