"When a fundamentally strong stock underperforms during a sector rally, it's usually telling you one of two things: either something is seriously wrong, or you're looking at a compressed spring that's about to release." Nate Bear, Lead Technical Tactician, Monument Traders Alliance I love it when I see my favorite setup forming in unexpected places. While the Nasdaq and other tech giants pushed higher Friday, Google (GOOGL) barely budged. That kind of relative weakness usually sends traders running for the exits. But when it happens to a stock with Google's fundamental strength, it often creates the exact conditions I look for in swing trades. Here's why I think GOOGL is setting up for a significant move higher, and how I'm positioning for it. The Setup I'm Seeing When a fundamentally strong stock underperforms during a sector rally, it usually tells you one of two things... Either something is seriously wrong, or you're looking at compressed spring that's about to release. With Google, I'm betting on the spring. Google remains my favorite of the Mag 7 stocks. The business fundamentals haven't changed overnight. Yet the stock is getting treated like damaged goods after earnings, even while Meta, Apple, and others found their footing. This disconnect creates the best swing opportunities - if you know how to read the technical signals. The Point of Control Here's where the technical analysis gets interesting. Google has established what we call a "point of control" around the $323 level. The point of control is the price level where the most trading volume occurred during a specific period - think of it as the price where buyers and sellers agreed was "fair value" based on their actual transactions. When a stock pulls back to test this level, you're getting a chance to buy where the most institutional volume traded. Google closed slightly below the $323 area during Friday's weakness. Which means it needs to recapture it before becoming a true trade candidate. And while it's off its recent high, the chart is still holding strong with EMAs stacked on both the daily and weekly time frames. Not to mention a daily squeeze that's forming. How This Stock Moves |
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