Peter Smith
Alphabet's incredible rally just hit its first real speed bump. After climbing relentlessly from spring lows below $150 all the way past $250, GOOGL finally posted a red weekly candle, closing around $247. The rejection near $255 last week wasn't just any pullback - it came with serious volume (87M shares), suggesting this isn't just a minor blip. The big question now is whether we're looking at healthy profit-taking or the start of something deeper.
The Technical Picture Gets Messy
As noted by trader JP - Tech Investor, the weekly chart tells a story of pure momentum that's now showing cracks. That monster run from April took the stock up over 65%, but hitting resistance near $255-$256 seems to have spooked some buyers. The good news? The 50-week moving average is still way down at $183, giving bulls plenty of cushion. The 200-week sits even lower at $143, showing just how stretched this move has been. Right now, the immediate battle is around $230 psychological support.
This pullback isn't happening in a vacuum. Alphabet's market cap has been expanding faster than some of its fundamentals can justify, creating natural pressure for a correction. The broader tech sector is also getting wobbly, and when the tide turns, even the strongest swimmers feel the current. After months of uninterrupted gains, smart money is probably taking some profits off the table before Q4 volatility kicks in. Nobody wants to give back a 65% gain just because they got greedy.
The Levels That Will Make or Break This Story
Here's what traders need to watch:
- Resistance: $255-$256 - The ceiling that caused all this trouble
- Current Battleground: $247 - Where we sit right now
- Key Support: $230 - The psychological level that could hold
- Deeper Support: $210-$200 - Where real buyers might emerge
- Moving Average Cushion: $183 (50-week) - Still miles away
As long as Alphabet stays above $230, the bulls are still in control of this story. A break below that level could trigger a deeper dive toward $210 or even $200. But if the stock can bounce from here and reclaim $255, we're probably looking at new highs before year-end. Either way, after such a massive run, a little consolidation might actually be exactly what this stock needs.
Peter Smith
