Alphabet Stock Tanks Before 20-for-1 Split

On July 18, the stock of Alphabet will be subject to a stock split of 20 for 1. The procedure for purchasing a stock ticket to the event is outlined here. The stock of Alphabet (GOOGL) experienced a great bounce the previous week but has been struggling over the past several days.

At the time of the most recent check, the share price had dropped by around 1 percent, and it has continued to fall each day this week. This is in spite of the fact that the company is planning to implement its 20-for-1 stock split on Monday, July 18 of this year.

Alphabet will become the second significant FAANG component to split its stock this year, following in the footsteps of Amazon (AMZN), who did so at the beginning of this month.

The worth of the company is not affected by a stock split; yet, according to the data, it may serve as a driving force behind an increase in the stock price over the course of the next year.

Up to this point in the year, we’ve had excellent performances before the split, but following, we’ve seen dismal performances. Both Amazon and Shopify fall under this category (SHOP). This price behavior is a textbook example of the “buy the rumor, sell the news” strategy.

When Alphabet is split into two companies, can we expect more of the same?

Throughout the first three months of the year, the level of $2,500 provided support for Alphabet stock. After the Mountain View, California-based corporation produced strong earnings and announced the 20-for-1 stock split in February, the share price rose to an all-time high of approximately $3,031 for a short period of time.

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After failing to find support at $2,500, the share price did not drop below $2,038 until it did so in May. This occurred just above the 50 percent retracement level, which measured the distance from the all-time high to the bottom in 2020.

Since that time, Alphabet stock has been riding the uptrend support higher (blue line), but it has had a hard time breaking through the resistance at $2,375.

It is not unusual for a stock to see a surge in the days leading up to an important event; however, although Alphabet stock experienced some great gains last week, the shares have essentially lost all of their previous momentum.

The bulls need to keep an eye on the lows of both this month and last month, which are between $2,100 and $2,115, from here on out. A breach of this zone might set off a monthly-down rotation, which would put the low for 2022 in play somewhere around $2,038.

Following that, the path is clear to state the obvious: $2,000 (after the split, that would be one hundred dollars).

If Alphabet stock actually moves to the downside, which is likely to occur in tandem with a downturn in the overall market, then it might put the zone between $1,780 and $1,800 into play (after the split, this would be $89 and $90).

There we locate the retracement level of 61.8% as well as the moving average of the previous 200 weeks.

Keep in mind that Alphabet, along with Apple (AAPL) and Microsoft (MSFT), has been one of the most successful stocks in the technology industry so far this year. Therefore, if the bulls are successful in driving it higher, it may put together an impressive rally.

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In particular, if Alphabet’s price moves higher than 2,270 dollars, it will be above its 10-day, 21-day, and 50-day moving averages.

This paves the way for an increase to $2,375, and then $2,500. Or, after the split, those amounts are 113.5, 118.75, and 125 dollars respectively.