Google Shallow Corrective Pattern Indicates More Uptrend Soon

The GOOG stock (Alphabet/Google) has been in a very strong bullish trend. The uptrend is valid since price action made a deep dip in March 2020 because of the COVID 19 pandemic.

Currently, the price action is showing another pause. Is the chart ready for a reversal or will the uptrend persist?

Price Charts and Technical Analysis

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The GOOG stock is building a consolidation zone at the 21 ema support zone. 

The 21 EMAs have been strong support ever since price action made a dip one year ago – with the exception of the pullback during September 2020. Let’s review:

  • The consolidation zone is probably a wave 4 correction (orange).
  • Waves 4 usually respect shallow Fibonacci levels like the 23.6%, 38.2%, or max 50% Fib.
  • A bullish breakout (green arrows) indicates an immediate uptrend continuation within wave 5 (grey) within wave 3 (pink).
  • The next target is located at the round level of $2,250.
  • A bearish breakout (orange arrow) indicates a deeper pullback. The main target is the 38.2% Fib.
  • The 38.2% or 50% is likely to act as support and send price action up again (blue arrow) within the larger uptrend.
  • Only a break below the 61.8% Fib places the uptrend on hold (yellow circle).
  • Whereas a very deep pullback invalidates the current uptrend (red circle).

On the 4 hour chart, there are two wave variants added. 

One shows a wave 1-5 (orange) completed at the recent high within wave 5 (grey) in wave 3 (pink). The other scenario is that price is now in a wave 4’ (orange) pullback. 

In any case, price action is expected to either make a bullish breakout (green arrows) or build a pullback towards the Fibonacci levels (orange arrow) and bounce (blue arrow).

(Click on image to enlarge)


Disclaimer: The opinions in this article are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit ...

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