Alphabet Inc (NASDAQ:GOOGL) has been rangebound since early August, but it has been trading in a constructive-looking fashion with a bullish undertone. On Monday, GOOGL stock made another breakout attempt that bulls should start to monitor.
As I’ve been saying for weeks now, rangebound markets — like what we’re witnessing in U.S. stocks right now — are exactly that: rangebound. While more active traders can look to buy stocks at the lower end of their range and sell at the upper end of ranges, juicy directional opportunities are more challenging to find. But because preparation is everything, rangebound markets allow me to look for pockets of relative strength and weakness. That way, when stocks are once again ready to move directionally, I’ll know where to put my money.
GOOGL stock is looking like one of those opportunities.
Speaking of relative strength, large-cap technology stocks — such as those in the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) — have shown meaningful relative strength versus the broader U.S. stock market since the first half of summer. Within the technology space, Alphabet shares have shown relative strength versus the QQQ, which you can see in the below ratio chart. Note that GOOGL stock is visibly coiling up to break higher above the black diagonal resistance line.
GOOGL Stock Charts
On the multiyear weekly chart, we see that GOOGL still is consolidating just below multiyear resistance.
While I’m not a big fan of chasing stocks higher at the top end of their longer-term up-trending ranges, Alphabet continues to show impressive relative and absolute strength. So I can’t rule out a near- to intermediate-term extension move above long-term resistance.
On the daily chart, we see the two-and-a-half month consolidation phase that Alphabet stock has been stuck in. Note that this is taking place above previous horizontal resistance (black horizontal) and also above the rising yellow 50-day simple moving average.
My proprietary B2 Reversal Indicator flashed buy signals in GOOGL stock both in late June and in mid-September, as marked by the two green arrows.
Monday’s rally pushed GOOGL back to the very upper end of the multiweek sideways range This could be another opportunity for a break higher. If and when shares can clear and hold above $820, then a next upside target for Alphabet stock should be in the $830-$840 zone.
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