• Alphabet shares surged to a record high earlier in July

• But stock pulled back due to reaching overbought levels

• Momentum indicators deteriorate but remain positive

• Q2 earnings release could provide fresh impetus

Alphabet’s shares have been in a steady uptrend since February, posting a fresh all-time high of 193.15 on July 10. However, the price has been experiencing a downside correction since then, with the 50-day simple moving average (SMA) providing downside protection for now.

Should bearish tendencies persist, the price could challenge the July low of 178.00. Sliding beneath that floor, the stock could descend towards 175.30, which acted both as support and resistance from April since June. A violation of that zone could set the stage for the May support of 170.80.

To the upside, stronger-than-expected financials could propel the price towards the June resistance of 187.30. Further advances could then stall at the 190.00 psychological mark, which also provided resistance in July. Failing to halt there, the stock could edge higher to re-test its all-time peak of 193.15.

In brief, even though Alphabet’s stock has corrected lower, the 50-day SMA seems to be capping its downside. Therefore, the stock’s next move could be decided by the outcome of its earnings release on Tuesday.