GOOGL Alphabet (Google) Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Alphabet is Topping Out on Long-Term Basis

Google is cooked, stick a fork in it. For Alphabet, which is the new name for Google, but everyone still calls it Google, use the GOOGL ticker symbol for charting since it has all the prior history. The GOOG ticker is only from 2014 to present. The GOOG ticker split into two symbols back then; GOOG and GOOGL. Just ignore GOOG.

The GOOGL monthly chart is in negative divergence across all chart indicators (red lines) so a neggie d spankdown is on tap for the monthly basis. Price is rising joyously but the indicators are running out of gas and slumping away. Google is running out of upside fuel. That said, you can see the near-term momentum since Federal Reserve Chairman Powell rode in on his pale green horse to save the stock market in late March, of course to protect America's wealthy class. This is how the crony capitalism system works.

The short green lines show the rally in the chart indicators due to the central banker largess. The FAANG stocks (FB, AAPL, AMZN, NFLX, GOOGL), and MSFT should be included, run obscenely higher due to people stuck at home because of the coronavirus (COVID-19). This lit the afterburners on the tech stocks and place markets in the dotcom bubble territory. Tech stocks (XLK) are at higher valuations relative to the broad stock market than they were when the dotcom bubble popped in 2000.

This near-term momentum will only be useful if the MACD line can poke above the 2018 high. If this occurs, GOOGL may stay toppy for another month or so, and then roll over. The money flow gets a boost from the Fed and people staying at home due to the virus over the last few months but remains neggie d over the last 7 years.

The overbot stochastics are agreeable to a pullback and the rising wedge pattern with price at the apex is an ominous set-up. The collapses from rising wedges can be quite dramatic; they can drop far and in a heartbeat. Price has violated the upper band so the middle band at 1276, and rising, is on the table as well as the lower band at 1008. 

The May 2015 stock market top is always mentioned as the last legitimate top. Long-time followers will remember Keystone calling that top back then. It is reasonable to expect the entire stock market to revert back to the 2015 prices over the next year or two. For GOOGL, the May 2015 top corresponds to the 550-ish level. This may be Alphabet's destiny over the next couple years. Most of you will spit your coffee across the kitchen table and shout, "Balderdash!" A drop to 550-ish would be a -65% crash in this tech giant. The monthly chart is topping out which means the ticker will be down for many months, perhaps years, ahead.

The ADX pink box shows the stellar strong trend for Google from 2013 into this year. Whoopsies, daisies. The ADX falls out of the pink box this year which means the rally higher in Google is no longer a strong trend higher. The Aroon green line is overbot and the red line is oversold both indications are bearish going forward, however, this pattern has remained in effect for several years. As Keynes said, "The (stock) markets can remain irrational (overbot) longer than you can remain solvent."

Let's drill down to the other time frames and see if we can find an entry for shorts. The GOOGL weekly chart is in bad shape; universal neggie d across all indicators. The MACD is trying to sneak out some strength that may help price linger at the highs for another week, but the chart is ugly. The daily chart receives a +2.6% orgy pop yesterday. Joe Sucka and Timmy Techworker are throwing money at GOOGL and other FAANG stocks, as well as MSFT and TSLA, begging to be the bag holdin' fools. The daily chart is of no forecasting use due to the gap-up move; it simply hints at sideways slop. Ditto the 2-hour chart. It has a bit more juice in the hour time frame. GOOGL may top out today and these highs over the last month may not be seen again for months and years, if then.

Keystone does not hold GOOGL long or short currently but will be looking for a short set-up perhaps in a few days or week or two when the daily chart provides clues for the top. If you are an intermediate or long-term trader, you can begin scaling into GOOGL now on the short side going forward. If you are long and enjoyed nice profits, or even if you just bot it, get out. If you short GOOGL going forward, you will be a happy camper come the holidays while the Alphabet bulls will be crying in their eggnog. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.