Is Alphabet (GOOGL) Oversold? Key Technical Indicators Suggest a Bounce Could Be Near

Alphabet Inc. (GOOGL) is looking oversold based on both weekly and daily charts, suggesting a potential buying opportunity. As of now, Alphabet’s share price is trading around $174.75. A closer look at the technical indicators and trendline support levels suggests that buyers may soon step in.

Alphabet Stock Testing Key Support Levels

Examining the weekly chart, we see that GOOGL is testing a long-standing trendline support, dating back to October 2023. Interestingly, this trendline also aligns with the 50-day moving average (50MA), which has been tested at market open.

Historically, each time Alphabet’s share price has retraced to this level, it has bounced back, suggesting strong technical support. This could indicate that we are nearing another potential reversal point.

Oversold Signals: Stochastic, Williams %R, and RSI Indicators

When applying technical indicators such as the Stochastic Oscillator and Williams %R, we see that Alphabet stock appears oversold.

• On the last five occasions where both the Stochastic and Williams %R reached similar levels, buyers stepped in, leading to a price rebound.
• While there is no guarantee of a repeat scenario, historical patterns suggest that conditions are favourable for an upward move.
• The Williams %R still has some room to edge lower, meaning further downside risk remains.

Daily Chart Analysis: 200-Day Moving Average (200MA) in Focus

Zooming into the daily chart, we see additional support around the 200-day moving average (200MA).

• The Relative Strength Index (RSI) is currently at 31, just above the oversold threshold (30), meaning there is room for a further dip before a potential reversal.
• If GOOGL stock moves lower, we could see a test of the $170-$171 range, where the daily trendline support is located.
• However, a drop to this level is not guaranteed, as the market could rebound from current prices, just as it did in previous cases.
  
  
  

Alphabet Stock Outlook: What Traders Should Watch For

While timing the market is challenging, history suggests that GOOGL may be approaching a short-term bottom. Key levels to watch:

- Trendline support at $170-$171 (on the daily chart).
- 200MA acting as a key support level.
- Stochastic, Williams %R, and RSI indicators suggesting oversold conditions.

If buying interest returns at these levels, Alphabet’s share price may see a near-term bounce. However, traders should remain cautious, as technical signals alone don’t guarantee outcomes.