Technical Update - Alphabet is turning bearish, could drop further. Microsoft above key resistance, will it stay up? Technical Update - Alphabet is turning bearish, could drop further. Microsoft above key resistance, will it stay up? Technical Update - Alphabet is turning bearish, could drop further. Microsoft above key resistance, will it stay up?

Technical Update - Alphabet is turning bearish, could drop further. Microsoft above key resistance, will it stay up?

Equities 5 minutes to read
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Alphabet GOOG C has 7% lower below the 100 daily Moving Average and testing the Gap area 127.85 – 125.70. A key support for Alphabet C.

A close of the gap i.e., a close below 125.70 could send Alphabet in a sell-off down to next big gap at 115.80.
That bearish scenario will be likely if RSI is closing below 40 threshold thus showing negative sentiment.

For Alphabet to avoid the bearish outcome a close above 127.85 and RSI above 40 are needed. To reverse to bullish trend a close of the gap created today i.e., a close above 136.23 is needed.

Medium-term Alphabet is breaking bearish out the its rising channel pattern. RSI divergence on the weekly chart has been seen for several weeks indicating weakening of the uptrend.
No strong support until around 116 area.

Source all charts and data: Saxo Group

Microsoft MSFT is opening above the resistnace at around 340.88. A close above will cancel the Doji Evening Star top and reversal pattern back from September.  It will also mean Microsoft is closing back above the Cloud (shaded area, indicating the stock being in bullish trend and sentiment)

If RSI is also closing above the 60 threshold, which it most likely will if share price is closing above 340.86, it will be showing positive sentiment. RSI has been showing negative sentiment until now .
If that scenario plays out the road higher towards all-time high at around 366.78 will be paved.

However, if buyers cannot keep the share price above 340.86 but instead closing it below, and below the upper Cloud area Microsoft can come under pressure.
A close below 324.39 will confirm bearish trend with support around 312

Medium-term if Microsoft is closing above 340.86 the bullish trend has resumed. RSI back above 60. If breaking above its falling trendline the RSI divergence is likely to be cancelled further supporting new all-time highs scenario


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