Frank Cappelleri of CappThesis breaks down the technicals in this megacap stock ahead of earnings. Frank works at a place called CappThesis. The name sounds like a financial services firm that also offers STD testing.
Charts show things. Support levels. Resistance. Moving averages that moved last week and will move again tomorrow. None of this predicts what Alphabet will report after the bell but Frank has drawn lines on a screen and those lines mean something to someone.
The technicals matter until the earnings print. Then they don't. Then they matter again Tuesday morning when retail traders convince themselves the rejection at the 50-day moving average was obvious in retrospect.
Alphabet will report revenue and profit or revenue and less profit. The stock will move. Frank's lines will either hold or break. If they hold Frank was right. If they break the thesis needed more time to develop. This is called analysis.
Every quarter the same ritual. Analysts appear on television before earnings to explain what the chart shows. The chart shows that the stock went up and then down and then up again. Sometimes it moved sideways. Frank has identified all of these patterns and color-coded them.
The megacap stock will gap in one direction after the bell. Traders who bought based on technical levels will either celebrate their genius or explain that the move was manipulated by institutions who don't respect chart patterns. Both groups will return next quarter.
Frank's charts prepared him for this moment. The lines converged. The indicators indicated. The volume confirmed the confirmation. Then Alphabet reported numbers and none of it f*cking mattered because the CFO said something about cloud growth that Frank's trendlines didn't account for.
Photo by Greg Rosenke on Unsplash
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