Google Bursts Through Channel Amid Chatbot Launch In Europe, Brazil: The Bull, Bear Case For Alphabet's Stock

Alphabet, Inc GOOG GOOGL was spiking up over 4% on Thursday, breaking up from a descending channel on the daily chart amid the launch of its chatbot, Bard, in Europe and Brazil.

Bard is a top rival of Microsoft-backed ChatGPT, which are both human-sounding programs that leverage generative artificial intelligence to converse with users and answer prompts.

Alphabet’s move higher caused the stock to negate its recent downtrend, which had been taking place within the channel pattern. For an uptrend to confirm, the stock will have to eventually retrace lower to print a higher low.

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 exponential moving averages) indicating the stock is in a steep shorter-term uptrend.

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The Alphabet (GOOG) Chart: Alphabet’s most recent confirmed high was formed on July 5 at $123.37 and the most recent low was printed at the $115.83 mark on Tuesday. On Thursday, Alphabet spiked higher than the July 5 high-of-day, which negated the downtrend.

• If Alphabet closes the trading day near its high-of-day, the stock will print a bullish kicker candlestick, which could suggest higher prices will come again on Friday. The next most likely scenario is that Alphabet will trade sideways and print an inside bar pattern to consolidate Thursday’s spike.
• Bearish traders want to see Alphabet eventually form a bearish reversal candlestick, such as a doji or shooting star candlestick, which could suggest the local top has occurred, and a retracement is on the horizon. Until Alphabet eventually negates its possible new uptrend, the stock isn’t likely to see a long-term downside.
• Alphabet has resistance above at $126.41 and $131.40 and support below at $122.10 and $117.23.

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