Alphabet C (GOOG) Surges 3.04% as Golden Cross and Bullish Engulfing Pattern Signal Strong Uptrend

Alphabet C (GOOG) Technical Analysis

Alphabet C (GOOG) closed at $206.72 on August 22, surging 3.04% for a two-day gain of 3.26%. This recent momentum warrants a detailed technical evaluation to assess trend sustainability and potential reversal points.

Candlestick Theory

Recent price action suggests a bullish continuation pattern. A strong white candle on August 22 (closing at $206.72) engulfed the preceding bearish candle, forming a Bullish Engulfing pattern—a classic reversal signal. Key support levels emerge at $197.46 (August 20 low) and $190.92 (August 4 low), while resistance is likely at $209.23 (August 22 high). The price has tested the $200.62 level twice, indicating a potential pivot zone.

Moving Average Theory

The 50-day moving average (approx. $194.50) has crossed above the 200-day MA (approx. $182.00), forming a Golden Cross—a strong bullish signal. The 100-day MA (~$190.00) aligns with the 50-day MA, reinforcing the uptrend. Short-term momentum remains intact, but traders should monitor the 200-day MA as a critical support level. Divergence may emerge if the 50-day MA flattens, though current alignment suggests the trend is likely to persist.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the MACD line crossing above the signal line, confirming the Golden Cross. The KDJ Stochastic oscillator shows overbought conditions (K: 85, D: 78), but no immediate divergence from price. This suggests the uptrend may extend, though caution is warranted if the RSI breaches 70 without a corresponding close above key resistance. A bearish crossover in the KDJ could precede a pullback.

Bollinger Bands

Volatility has expanded, with the upper band at ~$210.00 and the lower band at ~$185.00. The current price of $206.72 is near the upper band, indicating overbought territory. If the 20-day volatility continues to widen, a retest of the lower band (~$190.00) could occur before the trend resumes.

Volume-Price Relationship

Trading volume has spiked on recent up days (e.g., 25.7 million shares on August 22), validating the price surge. However, volume on the August 19 session (13.5 million) was lower despite a 0.88% decline, hinting at potential exhaustion. Sustained volume above 20 million shares per session would strengthen the case for continuation.

Relative Strength Index (RSI)

The RSI stands at ~72, entering overbought territory. While this does not guarantee a reversal, it suggests a potential pullback to the 60–65 range. A close below 60 would signal a bearish shift, but the current alignment with moving averages and MACD implies the uptrend may outlast typical overbought levels.

Fibonacci Retracement

A key Fibonacci level at 23.6% (~$199.00) has been tested twice in the past week, with the recent breakout above $206.72 suggesting the 38.2% level (~$203.00) is next in line. A break above $209.23 (the August 22 high) would target the 50% retracement (~$215.00).

Backtest Hypothesis

The backtest of a MACD Golden Cross strategy (buying on the 50-day/200-day crossover and exiting on a trend reversal) from 2022 to present showed moderate returns. The current setup mirrors the 2022 Golden Cross, with the 50-day MA crossing above the 200-day MA. Historical performance suggests holding through overbought RSI levels (70+) is viable, as the 2022–2025 uptrend persisted despite multiple RSI overbought warnings. However, the strategy’s success hinges on accurate trend reversal detection—caveats include false signals from KDJ and MACD divergence. Integrating Fibonacci retracement levels (e.g., 38.2% at $203.00) as dynamic exit points could improve risk-reward ratios.