On Monday shares of Alphabet (GOOGL - Get Report) closed down 2.5%, in contrast to the other momentum stocks TheStreet's Jim Cramer refers to as FANG: Facebook (FB - Get Report) , Amazon (AMZN - Get Report) and Netflix (NFLX - Get Report) . Each of these closed down by less than 1% Monday.
Alphabet is up 8% over the past 52 weeks, but has underperformed all its FANG counterparts by a considerable margin in that time on multiple time frames. That trend looks likely to continue at least in the short term.
A large rising wedge has formed on the weekly chart over the last year, and last week a high wick or long upper shadow shooting star candle formed at the pattern resistance line. The shooting star is often seen at price highs and is a bearish reversal candle. It suggests buyers are beginning to take profits.
Moving average convergence/divergence has been declining over the same period in bearish divergence to price and the stochastic oscillator is making a negative crossover in its overbought zone. The Chaikin money flow indicator dropped into negative territory last year at the start of the November 2016 rally, and is another diverging indication.
On this timeframe the technicals suggest that Alphabet will retest the rising wedge support line. A pattern breakdown targets a deeper decline that could take the stock price back down to last year's low.
Since reporting fourth-quarter earnings on Thursday the stock has dropped 4% and retraced 38% of the rally that began last November, taking it back to the uptrend line that has supported the advance. A return to the 62% retracement level, at this point in price, would translate to a retest of the weekly rising triangle support line.
On the daily timeframe, the relative strength index has crossed below its center line and moving average convergence/divergence is making a bearish crossover. The surges in negative volume over the last three sessions are individually over 100% greater than the 50 day moving average of volume, readings not seen since the 11% October to November 2016 decline.
Apple (AAPL - Get Report) reports earnings Tuesday and Facebook reports Wednesday. Strong numbers in either stock would see the technology sector bounce, but the technical indications on multiple timeframes suggest if that were to be the case, any jump in Alphabet shares should be sold.