How to Trade Alphabet Stock After Earnings and Revenue Miss

Alphabet stock slumped after missing on earnings and revenue estimates. The chart setup, however, is quite clear.

Shares of Alphabet  (GOOGL) – Get Alphabet Inc. Report  (GOOG) – Get Alphabet Inc. Report on Wednesday are rallying off the lows, but they still look vulnerable after the search, advertising and cloud company reported earnings after the market close on Tuesday.

Alphabet delivered a top- and bottom-line miss, just as it did last quarter. It’s rare for the tech giant to miss on sales and earnings expectations, let alone do it in back-to-back quarters.

Looking forward, management noted a tough comparison in the holiday quarter paired with economic headwinds and a strong dollar.

It doesn’t help sentiment that Microsoft  (MSFT) – Get Microsoft Corporation Report also traded lower this morning after earnings. It also raises questions for Meta  (META) – Get Meta Platforms Inc. Report, which reports tonight.

Through all this the S&P 500 is trading higher on Wednesday, while Alphabet rallies off the low, though it’s still down 6% on the day.

Trading Alphabet Stock

Daily chart of Alphabet stock.

Chart courtesy of

On the daily chart above, it’s no surprise that today’s decline timed up perfectly between the chart and the news.

Alphabet delivered a disappointing quarter, which coincided with the stock running into resistance near $105 and the declining 50-day moving average.

But support came into play right where it has for the past month: At $95. 

Three times now, this level has buoyed Alphabet stock. From here, the layout is rather clear.

The first upside level to watch is $100. Not only is it an even, psychologically relevant level, it’s also where the 10-day and 21-day moving averages sit. It wouldn’t be surprising for this area to be resistance.

But if it’s reclaimed, the bulls can be long against the $95 level and look for a gap-fill back toward $102.72, then $105 and the 50-day. (If the bulls can regain momentum on a disappointing result, it adds even more strength to their hand.)

On the downside, a break of $95 opens the door into the low-$90s, where the stock finds what should be a strong zone of support.

One theory is that Alphabet stock continues to bounce off $95 as big investors pile into the stock before it gets a chance to test key support. 

Because this support zone is so big, these investors could be getting long positions just above it, willing to sacrifice a few dollars in downside in hopes of capturing a much larger move to the upside.

The bottom line: Keep an eye on $100. Above it is incredibly constructive for the bulls. Below it and Alphabet stock remains vulnerable. 

Related Posts

Union Capital Financial Group Ltd, registered in the British Virgin Islands, does not provide investment services inside the United States. The company only provides consulting, advisory and educational services.