Over the last one- and three-month periods, Alphabet is dominating its mega-cap tech peers.
Alphabet is up 15.5% and 14.4% during those spans, respectively. Of the FAANG group, the next closest performer - in both time periods it’s Facebook (FB) - Get Report -has risen just 3.5% and 3%, respectively.
In that sense, Alphabet’s performance is really impressive; it’s become a relative strength leader.
The outperformance can be traced back to late October when Alphabet and its peers reported earnings. In fact, Apple, Amazon, Facebook and Alphabet all reported on the same evening.
All of them but Alphabet had a bearish reaction to the quarter. As you can see on the chart, Alphabet shares popped higher, then gave us a nice two-day consolidation (blue box) before again gapping higher above $1,700 and the prior all-time high from September.
The prior high came into play near $1,725, a level that Alphabet stock is now holding as support. That’s very constructive price action.
Further, bulls are seeing the stock wedge into a tighter and tighter range (blue lines).
Now bulls want to see a rotation higher. Specifically next week, Alphabet stock could rotate over this week’s high at $1,794. It’s also worth mentioning that short of a violent move in the next few hours, the stock is giving us an inside week. That’s where this week’s range is contained within the entire range of the prior week.
In many traders’ minds, that’s just simple consolidation.
If we get a weekly-up rotation, it will put the current all-time high in play at $1,817. That’s followed by the 161.8% extension at $1,853. That’s up more than $100 a share from Friday’s low and nearly the same amount from Thursday’s close.
The stock is sporting a nice high-and-tight consolidation that will hopefully resolve higher. If it doesn’t, look for a break below the September high near $1,725, followed by the 20-day moving average.
Below both would put a gap fill in play near $1,675.