Traders are rushing for the exits on Alphabet to try to preserve any profit they have left in the struggling technology bellwether, explains Steve Grasso . (See Steve’s video above for the full explanation.) Grasso, CEO of Grasso Global who spent three decades trading from the New York Stock Exchange, said that Alphabet’s moving averages converged this week heading into Wednesday night’s poor earnings report . “If you look at the chart, all these moving averages are stacked on top of each other,” said Grasso. “What does that tell you? It tells you that the stock has done nothing for a year, and everyone has the same cost basis.” Cost basis is the average price a trader paid for a stock. Chart analysts often use moving averages to measure various key levels where large amounts of investors purchased shares. “So everyone’s looking to get out at the same price, and that price is now,” he added. Alphabet shares were set to open 11% lower on Thursday after reporting worse-than-expected earnings, revenue and CapEx spending in the prior quarter. The company also reported negative free cash flow of $9.07 billion. The second quarter “was the first time they went free cash flow negative until this quarter. So now we have a pattern. [The] market pays for cash, not investment,” said Grasso. ” Apple looks like the safety stock now, no longer Google,” he added.
