By relative strength, Alphabet (GOOGL) is an unloved stock | Don’t ignore this chart!

Almost two weeks ago, I discussed why I felt Alphabet (GOOGL) was poised for a post-earnings decline in the free EB Digest newsletter. It was continuing to rise, which on the surface was a fairly optimistic sign. But looking at how strong Internet stocks ($DJUSNS) have performed overall, it’s clear that the big Wall Street companies aren’t overly impressed with GOOGL ahead of its quarterly earnings release. Check out the bottom two panels. The first panel shows the relative strength of GOOGL:$DJUSNS, while the second panel shows the relative strength of Meta Platform (META) and Internet Group (META:$DJUSNS).

In a January 26 EB Digest newsletter article, I introduced the above trading range (139-144) as a possible landing area for GOOGL after earnings. On the earnings side, GOOGL was overbought and a significant relative relative to performance. META mainly While GOOGL is an Internet group, Beneficiary of belonging to a powerful group. However, GOOGL’s recent weakness has pushed the stock down to a 139-144 trading range, and GOOGL is now testing its long-term uptrend line. I expect a price rebound here, but what I will be watching is relative strength.

The more leading stocks in leading industry groups we own, the better our portfolio is likely to perform.

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Happy trading!

tom