Alphabet Pulls Back to Post-Earnings Level

Alphabet has struggled more with coronavirus than some other big technology names because of its reliance on advertising. GOOGL is still below its old $1 trillion market cap level, even after Microsoft, Amazon.com and Apple reclaimed (or kept) that honor.

GOOGL had a decent earnings report on April 28. The growth in non-search businesses like YouTube was especially interesting. This remains the potential kicker for Sundar Pichai and the Internet giant: a huge, under-monetized division with the potential to start delivering. YouTube’s a secular driver. If you think the worst of the economic crisis is over, traditional search advertising could be a cyclical catalyst as well.

GOOGL gapped higher after that quarterly report, and earlier this week reached its highest price since February 25. It then pulled back with the rest of the market and is now holding the same $1,340 area where it traded immediately after earnings. It’s also near a post-breakout consolidation zone from December and the 100-day simple moving average (SMA).

Given its massive size, GOOGL is unlikely to rally without the rest of the market behind it. If you think S&P 500 will hold this area after touching a three-week low today, GOOGL may interest you around these levels.