Key Takeaways
- Shares in Google parent Alphabet could remain in focus on Wednesday after climbing to a five month high today, boosted by the recent unveiling of a quantum computing chip called Willow.
- The stock broke out above a symmetrical triangle on Tuesday, indicating a continuation of the longer-term uptrend.
- Bars pattern analysis forecasts a potential upside target of $317 and indicates that the stock’s uptrend may play out until March 2026.
- Investors should watch important support levels on Alphabet’s chart around $150 and $122.
Shares in Google parent Alphabet (GOOGL) (GOOG) climbed to a five month high Tuesday, boosted by optimism around the tech giant’s recently unveiled “breakthrough” quantum computing chip called Willow. And investors will be closely monitoring where the stock’s headed next.
The chip, which Alphabet says could take minutes could complete computations that would take supercomputers 10 septillion years, forms part of the company’s roadmap toward a quantum computer with applications in drug discovery, fusion energy, battery design, and more, CEO Sundar Pichai posted on X, Monday.
Despite the stock coming under pressure in the third quarter over antitrust concerns, the shares have rebounded 27% since their early September low and trade more than 30% higher on the year through Tuesday’s close.
Below we analyze the technicals on Alphabet’s weekly chart and point out important price levels worth watching out for.
Symmetrical Triangle Breakout
After topping out in early July, Alphabet share traded within a symmetrical triangle before breaking out above the pattern’s upper trendline on Tuesday, indicating a continuation of the stock’s uptrend.
Moreover, the relative strength index (RSI) confirms bullish price momentum with a reading above 60, but sits below the overbought threshold, giving the shares room for further upside.
Let’s apply technical analysis to provide clues how a longer-term continuation move may play out and also identify several important support levels to watch during retracements.
Bars Pattern Analysis
To help forecast where Alphabet shares may be headed next, investors can use the bars pattern tool, a technique that analyzes prior trends to assist in predicting future directional moves.
When applying the tool to Alphabet’s chart, we take the stock’s trending move from April 2023 to July this year and reposition it from its most recent breakout level. This forecasts a longer-term upside target of around $317, about 70% above Tuesday’s closing price. We selected this prior trend as it commenced following a breakout from an earlier continuation pattern on the chart, replicating price action similar to the stock’s current breakout.
Investors can also use the bars pattern tool to speculate how long a continuation move in the stock may last. For instance, the prior trend took place over 65 weeks, meaning a similar move could play out until around March 2026 if we rely purely on price history.
Important Support Levels to Watch
The first support level to watch sits around $150. A retracement to this area could see investors seeking buying opportunities near a multi-year trendline that connects several prominent prior peaks with the September 2024 trough.
Selling below this key area could prompt a fall to the $122 level, a location on the chart where Alphabet shares may find support from a horizontal line linking similar trading prices on the chart between April 2021 and October last year.
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