As the market remains volatile and under pressure, investors are hoping that mega cap technology will be the ones to save the day.
Microsoft () and Alphabet () will publish earnings on Tuesday, although others FAANG members will distribute earnings.
For several reasons, the alphabet is a very interesting one.
First, it has some of the most impressive financials in the entire market. Its balance sheet is robust with an enormous cash balance, a stock buyback plan, and little debt.
Second, it continues to churn out strong growth. Last quarter, year over year, while analysts predict more than 17% growth.
In other words, the company continues to grow in its current business, and it should be described as a flight-to-safety trading. That's as the stock only trades at 20 times this year's earnings, cheaper than Procter & Gamble () - at 27.5 times earnings.
Even if the Nasdaq's bear market hit late February, Alphabet stock reached all-time highs due to strong earnings results and after announcing a.
This time, will it receive the same post-earnings boost? We don't know what we know, but we know some of the key levels to keep an eye on.
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Alphabet stock's weekly chart
TrendSpider.com has made a chart.
Following the sale of Alphabet's $2,500 facility last week, the company had remained strong support floor all year long, while bulls were optimistic that the company's robust balance and cash flows would make it a go-to holding.
Alphabet's stock fell 9.5 percent in the last three days of last week, bringing shares down 21% below the all-time high from February.
Stocks must see the stock rise to the $2,500 level and remain above it. The 21-day and 50-day moving averages are in play next, near $2,665.
Beyond that, the opening of the 200-day moving average and last month's high near $2,875 will be added to this level so that the resistance will be reviewed more easily.
The 21-month moving average and the $2,250 area are all out. The latter is a 38.2% retracement for the entire range (from this year's high to the 2020 Covid low).
Below that might open the way down to the $2,000 area, where the stock would find its 50% retracement and the monthly VWAP measure.
Bear in mind that this high-quality holding is already down 20% from the high. Alphabet stock will have to be down 25% from the high, while the second target ($2,000) would show a 33% decline in highs.