Alphabet shares fell sharply following earnings as investors focused less on another strong quarter and more on management’s plans for increased AI spending. While revenue and earnings topped expectations, the market questioned whether the pace of capital expenditures will pressure future profitability, prompting heavy institutional selling.

Technically, the chart reflects that shift in sentiment. GOOGL broke decisively below both its 20-day EMA and 50-day SMA on significantly above-average volume, signaling that sellers were firmly in control. The RSI has dropped to just above 30, approaching oversold territory, which suggests downside momentum has accelerated. Although the stock may be due for a short-term bounce after such a steep one-day decline, traders should watch to see whether former support near the moving averages now becomes resistance. A recovery back above those levels would improve the technical outlook, while continued weakness could lead to additional selling pressure.

Wishing you the best, 

Wendy

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