The Weekly Scorecard
This past week, GOOGL was a notable laggard against the broader market indices. While the S&P 500 (SPY) and Nasdaq (QQQ) managed to find some stability, GOOGL underperformed, failing to keep pace with its mega-cap tech peers. The relative weakness was clear and consistent throughout the five trading sessions.
Investors tracking relative strength would have noticed this divergence early in the week. By failing to participate in intraday bounces seen elsewhere, GOOGL signaled that sellers were in firm control. You can See the charts that matter on TrendSpider to visualize this type of relative performance comparison against key benchmarks.
Why It Moved
The downward pressure on GOOGL was not driven by any specific company news but was a direct result of macroeconomic headwinds. Concerns over persistent inflation and the potential for higher interest rates for longer have put significant pressure on high-duration assets like tech stocks. GOOGL, despite its strong fundamentals, was dragged down by this sector-wide sentiment shift.
As capital rotated out of growth-oriented names and into more defensive sectors, GOOGL was caught in the crossfire. The stock's price action was tightly correlated with the movement in Treasury yields, selling off as yields ticked higher. This indicates that the market is currently pricing GOOGL based on macro factors rather than its individual operational performance.
The Weekly Chart
The weekly candle for GOOGL tells a bearish story. The stock closed significantly off its weekly high, finishing near the lows of the period. This type of candle, often called a “black candle” or one with a long upper wick, suggests that buyers attempted to push the price higher but were ultimately overwhelmed by selling pressure.
Currently, the stock is testing a critical support zone established in previous months. This area represents a prior consolidation range where buyers have historically stepped in. A weekly close below this level would be a technically significant breakdown and could signal further downside ahead.
Next Week's Playbook
The key level to watch for next week is the low of this past week. A definitive break and close below this price would confirm that the aforementioned support level has failed. This could open the door for a swift move down to the next major support area.
Conversely, for bulls to regain control, they must reclaim the midpoint of this week's candle. If GOOGL can push back above that level and hold, it would suggest the recent selling was an overreaction. However, given the current macro environment, the path of least resistance appears to be to the downside until the broader market sentiment improves.
Content is for info only; not financial advice.