The broad-based market selloff last Thursday and Friday was enough to break even the most bullish of single-stock charts for the immediate term.
The famed FANG stocks, however, continue to hang in there on a relative basis and could see some further upside into January, should Santa be able to bring a bid back into this market.
Shares of Alphabet Inc (NASDAQ:GOOGL) also came under pressure last Thursday and Friday, but still held support and closed marginally higher on a week-over-week basis.
Active investors and traders could look to buy GOOGL stock upon the next bullish reversal for a move to fresh all-time highs.
It was a volatile week for stocks last week to be sure. Stocks acted in a giddy manner going into Wednesday’s big FOMC interest rate decision and further perked up after the unanimous decision to hike interest rates for the first time in nearly eight years.
By Thursday morning a different tone struck as a heavy options expiration loomed on Friday and fund investors sold off losing stock positions in the energy sector and elsewhere, but kept big winners like GOOGL stock on the sheets. Odds are that the FANG stocks will continue to hold up well in relative and (likely) in absolute terms going into year-end and early 2016, as fund investors mark up their books for window-dressing purposes.
GOOGL Stock Charts
While GOOGL stock has worked higher this year, it was stuck in a trading range until July where it jumped sharply, breaking out of an 18-month consolidation phase.
For perspective I drew the two parallel lines on the multi-year chart, which shows that the stock quickly moved from the lower end of its range to the upper end.
In November GOOGL stock began working on an overshooting move to break above the upper resistance line. While such moves can extend higher, it is important to consider that such overshooting moves can ultimately result in a meaningful mean-reversion move back into the big picture channel.
In other words, while I see GOOGL as having overshooting potential in coming weeks or months, it will likely make a move back into its uptrending channel.
On the daily chart, we see that after breaking past horizontal resistance in late October, GOOGL stock once again settled into a consolidation phase, which last week bounced off its rising yellow 50-day moving average.
This moving average currently also coincides with the lower end of this trading range, which is to say that active investors can use it as a level to play the stock against from the long side.
Active investors will however first want to see a bullish reversal on a daily closing basis, which would signal better upside momentum again and could see the stock into the $810 to $820 area into early 2016.
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