Google’s Alphabet is Second FANG to Produce Bearish ‘Death Cross’

Jacob Maslow  |

Google’s parent company Alphabet is the second FANG to produce a bearish “death cross” chart pattern for the first time in more than two years. Investors fear that it may put the future of the tech giant’s bull market at risk, according to Barron’s.

Alphabet’s 50-day moving average dropped from $1,132.173 on Wednesday to $1,129.574 on Thursday. The stock crossed below the 200-day moving average, which fell from $1,130.585 to $1,129.947.

Some investors believe that the “death cross” signals that a shorter-term slump will morph into a long-term downtrend. Death crosses aren’t always reliable market-timing signals, but they often indicate that the downtrend is more than just a pullback.

Google’s announcement on Project Treble may help boost the stock. Thanks to Treble, Google says more devices will be running Android 9 Pie at the end of the year than the number of devices running Android Oreo at the end of 2017. Updates will be much faster thanks to Project Treble, which is something users have been complaining about for years.

The company also announced earlier in the month that Android would natively support “foldable” devices to minimize fragmentation. Google has been working closely with Samsung on how Android can develop foldables.

Alphabet’s stock last produced a death cross in 2016, but the stock skyrocketed 19% over the following three months.

Although the company’s shares gained 1.6% on Thursday, the stock has lost 17% since its record close of $1,285.50 on July 26.

Alphabet is the second FANG (Facebook, Amazon.com, Netflix, Google) stock to produce a death cross.

The death cross appeared on Facebook’s chart in September. The stock has fallen 13% since then, and is now 34% below the July 25 close of $21.50.

Netflix may be the next company to produce a death cross. The 50-day moving average came in at $338.062 on Thursday and has been falling more than $1 per day this month. The 200-day moving average came in at $336.062 and has been increasing $0.246 per day. The stock has declined 31% since closing at a record of $418.97 in July.

Amazon may not be too far behind. The stock’s 50-day moving average hit $1,812.380 earlier in the week and has been declining about $6 a day. The 200-day moving average is at $1,688.491 and has been increasing $1.435 per day. Shares have fallen 21% since closing at a record high of $2,039.51 in September.

DISCLOSURE: The author does not have any stake in the listed equities


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