Early last week Alphabet  (GOOGL) reached new all-time highs.  On Friday, following its impressive third quarter earnings report, the company reached a higher high on very heavy trading. Since that peak early Friday the stock has been under heavy pressure. Shares have lost ground all four days this week on well-above-average volume.

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October's post-earnings spike near $840 looked fairly ominous by the close that day. Yesterday's clear break of the October low confirmed a significant high has been put in place. Today this heavy overhead pressure has driven Alphabet below the September and August lows as well. The stock has now left behind layers of very heavy supply. Before Alphabet can return to rally mode a healthy base will need to be built. More downside is ahead before that process can begin.

In the near term, patient Alphabet investors should keep a close eye on the $769 area. A drift down to this level would fill the huge breakout gap left behind following the company's second-quarter earnings report. This important level is the top band of a major support zone that includes the stock's 200-day moving average near $760. If Alphabet can regain its footing here a low-risk entry opportunity will develop.

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