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Key Takeaways
- Alphabet shares will be in focus on Monday after a report Sunday that the Google parent is in advanced discussions to acquire cybersecurity startup Wiz for around $23 billion.
- The stock climbed to a record high on Wednesday, but closed lower for the week, potentially setting the stage for a retracement.
- The Alphabet share price could find support at key levels on the chart including $175, $150, and $134.
- A bars pattern that takes the stock’s upward move between March last year and January this year and overlays it from the March swing low projects a longer-term price target around $215.
Alphabet (GOOGL) shares will be focus on Monday after the Wall Street Journal reported Sunday that the Google parent is in advanced discussions to acquire cybersecurity startup Wiz for around $23 billion, citing people familiar with the matter. If the deal were to proceed, it would mark the tech behemoth’s largest ever acquisition.
Below, we take a closer look the Alphabet’s weekly chart and use technical analysis to identify important levels to watch out for.
Weekly Reversal Amid Decreasing Trading Volumes
Since bottoming out around the 200-week moving average (MA) early last year, Alphabet shares have continued to trend higher, with investors promptly buying the dips.
More recently, the stock climbed to a record high on Wednesday, but closed lower for the week, potentially setting the stage for a retracement. It’s also worth pointing out that trading volumes have trended lower since the stock gapped nearly 7% after Bloomberg reported in mid March that the tech giant was in talks to license its Gemini artificial intelligence (AI) models to Apple (AAPL), potentially alluding to slowing buying momentum.
Monitor These Key Levels During Retracements
If a pullback eventuates, investors should monitor three key areas where the stock would likely encounter support.
The first area to watch sits at $175, where the shares may attract buying interest near a series of similar prices between late April and early June.
A close below this level could see a retest of the $150 area, a region likely to attract buyers near the rising 50-week MA and a key horizontal line linking several prior record highs in the stock from November 2021 to January this year.
Further weakness could trigger a fall to around $134, where bargain hunters may seek lower-priced buying opportunities near a multi-year trendline.
Watch This Longer-Term Price Target
To gauge a potential longer-term upside price target, we can take the a bars pattern from the stock’s upward move between March last year and January this year and overlay it from the March swing low. This projects a target of around $215, an area where the stock may face selling pressure, especially if other technical indicators point to overbought conditions at the same time.
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As of the date this article was written, the author does not own any of the above securities.