Alphabet (GOOGL) - Get Report is one of the main reasons the Nasdaq 100 is by far the weakest major index today. The stock is off just over 1.5% as it continues to extend the drop from the December highs. Shares are trading well below last week's low and are beginning to leave behind a rather ominous top. Before Alphabet reaches support more downside is likely.
After moving past the November peak three weeks ago Alphabet began to stall out. The stock has had difficultly clearing the area near the November high since August. Heavy resistance between the $810 and $840 area has capped the last five monthly highs and is now beginning to bear down once again on the action.
The light upside momentum during the early December run coupled with a continuing divergence in the MACD indicator has put Alphabet in a vulnerable spot. For patient investors this should lead to lower entry levels in the near year.
Alphabet has very little support in place until it reaches the $771 area. The stock's 200-day moving average rests here. In the near term this level should serve as a minimum downside target. If Alphabet is unable to regain its footing near this major support zone, a dip down to the November low could quickly follow.