Alphabet Stock Bears Likely to Allow a 25% Recovery

Bullish   

With nine services having more than a billion users each, many think Alphabet has the widest business “moat” the world has ever seen. Through Search, Chrome, Android, YouTube, Chrome and Gmail, to name a few, the company has literally embedded itself into society’s everyday life. And as if it wasn’t dominant enough before Covid-19, the pandemic only gave Alphabet another boost.

2021 sales surged 41% to $257 billion, producing a net profit for the company of more than $76B. That is a very healthy 30% net profit margin for a company that employs little debt and is still growing at an above-average rate. Furthermore, 2022 revenue is expected to approach $290B, up almost 13% from the year before.

Yet, following the spectacular pandemic surge, the stock has been quite a disappointment so far this year. After reaching an all-time high of $151.55 in early-February, GOOGL has been losing ground ever since. Yesterday, the stock closed below the $100 a share mark, down 34.5% in less than eight months. Given the undoubtedly very high quality of the business, many see this dip as a buying opportunity.

Alphabet Stock can recover 25% before the bears return

Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to recognize them yourself!

And we think they are right, but only in the short and long run. The mid-term, unfortunately, looks a lot messier. That is because the drop to $99.27 so far looks like a textbook five-wave impulse. We’ve labeled it 1-2-3-4-5 in wave A, where wave 4 is an expanding triangle.

According to the Elliott Wave theory, a three-wave correction in the other direction follows every impulse. This means that we can expect a recovery of at least 25% up to $125 in wave B as soon as wave 5 of A is over. As long as Alphabet trades below $151, however, the odds favoring another notable decline in wave C are going to remain high.

It is impossible to tell how low the can bears drag the stock in wave C. Nevertheless, they should at least be able to breach the bottom of wave A. In our opinion, investors should take advantage of any such weakness to establish long-term positions in Alphabet. That’s precisely what we plan to do.

In our Elliott Wave PRO subscriptions we provide analyses of Bitcoin, Gold, Crude Oil, EURUSD, USDCAD, USDJPY and the S&P 500 twice a week! Check them out now!

New to Elliott Wave?

Elliott Wave principle offers a completely new understanding of what the nature of the markets is, what drives them and what can be derived from their movement. This course is for those of you, who have been looking for an honest Elliott Wave guide, describing the method’s advantages over other trading tools, but not hiding its weaknesses.

Check Video Course    or     Check our eBook


See our Video Course
or check our eBook

Last year over 60k readers trusted EWM Interactive to help them in their trading decisions.

I’m very happy i discovered your service. Thanks so much and keep up the good work!

- Xavier N.

Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)

- J. Kotzee

I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.

- C. Montgomery

I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.

- C. Montgomery

I’m very happy i discovered your service. Thanks so much and keep up the good work!

- C. Montgomery

Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)

- C. Montgomery