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

Price Charts and Technical Analysis

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

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

1. The consolidation zone is probably a wave 4 correction (orange).
2. Waves 4 usually respect shallow Fibonacci levels like the 23.6%, 38.2% or max 50% Fib.
3. A bullish breakout (green arrows) indicates an immediate uptrend continuation within the wave 5 (grey) within wave 3 (pink).
4. The next target is located at the round level of $2,250.
5. A bearish breakout (orange arrow) indicates a deeper pullback. The main target is the 38.2% Fib.
6. The 38.2% or 50% is likely to act as support and send price action up again (blue arrow) within the larger uptrend.
7. Only a break below the 61.8% Fib places the uptrend on hold (yellow circle).
8. 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).

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter 

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