Just a little over a week ago, Alphabet Inc (NASDAQ:GOOGL) reported solid earnings. The stock jumped sharply higher on those results, trading as high as $1,063.62 in early trading. However, Alphabet Inc quickly reversed, closing at around $1,031.00. The reversal put in a topping tail on the daily chart. In the days following that major up-move and reversal, the stock has inched higher. This inching higher, forms what is known in the technical world as a bearish, inside-bar pattern. Coupled with the topping tail on the daily stock chart, it is a strong sell signal. Ultimately, investors should be expecting a sell-off to take place, pushing Alphabet Inc to below $1,000.00 in the coming weeks. The gap fill from before earnings is my target at $990.00. In addition, what makes this a nice trade is that neatly defined stop. Any daily close above the topping tail high at $1,062.63, stops you out. This means the risk is about $17 while the reward is about $56. Solid risk/reward in my book.
