Alphabet Inc: This Chart Shows Where Google Stock Could Go Next
Why I’m Bullish on Google Stock
Alphabet Inc (NASDAQ:GOOGL) stock happens to be one of those stock picks many investors put away as a long-term investment and watch it grow with little worry.
Don’t believe me? Read on…
What if I told you that my recommendation on Google stock is strictly based on the price action that we can observe on the stock chart? Would I still have your attention?
Most people just look at a price chart and cannot make heads or tails of it. I have been using charts as a trading and analysis tool for the better part of a decade and have had some great success doing so. My secret to success: perspective.
The one-year price chart for Google stock is presented below:
Chart courtesy of www.StockCharts.com
Aside from a few small trading setups, the short-term chart is littered with noise. Shares swing between highs and lows, confined within a $120.00 range. Nothing of real value can be obtained from this short-term chart that can be used to garner any long-term investment decisions.
It is easy to get lost in all the noise that a short-term chart can provide. It is always best to look at the big picture and in this case, that translates into the long-term chart.
The chart below illustrates the trend observed in the Google stock price since its inception.
Chart courtesy of www.StockCharts.com
The trend observed is flawless and it spans a decade. Since shares first went public in 2004, the trend has been from the lower left to the upper right. It’s basically every investor’s dream. Every sell-off was supported by demand from buyers as the stock price approached the aforementioned trend line.
The beauty of such a trend is that it serves many purposes. If I am looking to buy on a decline, I could set buy orders on the trend as it acts as support. If I am looking to protect profit, I could set stops just below the trend, assuming the stock falls below the trend, that uptrend is no longer intact and a major trend reversal is at hand.
From a similar perspective, it’s not only that the trend that is painted perfectly, but the bullish setups are also very precise.
Chart courtesy of www.StockCharts.com
Google stock rises in a clear step-up pattern followed by consolidation in a repeating pattern. The most notable aspect is the trading action. Google stock always returns to test the breakout level that served as resistance in the consolidation, which is known as the backtest. The backtest reaffirms the breakout and confirms the bullish bias. It also presents investors with a second chance to purchase shares at the new resistance level that has now become support.
The Bottom Line on Google Stock
The trend in Google stock presents investors with an opportunity to own shares in a company that requires very little maintenance. When you look at the chart from a long-term perspective, much of the daily noise disappears and a clear concise picture is presented. Google stock has a predictable trading pattern that is reoccurring. The stock will continue to trade higher in a bullish fashion until one fateful day when the trend line is broken, signalling a trend reversal.
