Technical Warning: Apple Could Fall to $325, Alphabet Faces Over $100 Downside
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Barron's senior technical analyst Doug Busch warns that Apple and Alphabet both show exhausted chart patterns — Apple could slide to $325 this year, while Alphabet sits more than $100 above its rising 50-month moving average, putting Big Tech's valuation premium under fresh scrutiny.
What are Apple's candles signaling?
Apple broke above the $288.72 cup-base pivot in May and rallied, but before earnings it printed two doji candles and a bearish shooting star. This means → buyers pushed higher each time, but sellers capped every attempt — momentum stalled.
The stock gapped down 7% after its July 31 earnings report. The subsequent bounce traced a bearish rising wedge — a pattern where price edges up but each rally is smaller and the range narrows, a classic topping structure.
A doji reappeared on September 22 and a spinning top on Friday. Busch projects Apple will fall to $325 by year-end, roughly 7% below Monday's ~$343 trading price.
Why is Alphabet's situation worse?
Alphabet has dropped 22% from its May 18 52-week high, entering a technical bear market. That May peak itself came with a bearish shooting star.
The monthly chart shows a bearish divergence: price made higher highs from January to May, but RSI — relative strength index, a gauge of up-vs-down momentum — printed lower highs. In plain terms = the price kept climbing, but the force behind it was already fading.
The stock closed lower in 8 of the past 11 months, with exhaustion doji candles in both May and July — signals that neither bulls nor bears can push further. The downtrend is well established.
What is the "50-month moving-average reversion" thesis?
Busch cites a historical pattern: Alphabet reverts to its rising 50-month moving average — the average of 50 months' closing prices — roughly every two to three years.
Two precedents: in March 2020 the stock touched the line near $50 and rebounded sharply; from October 2022 to March 2023 it found support near $80 and launched a new bull run.
The 50-month average now sits more than $100 below Alphabet's current price of roughly $320. Busch sees a high probability the stock retests that support by 2027. This means → if history's rhythm repeats, Alphabet's correction may be less than halfway done.
What is happening to the Magnificent Seven as a group?
The Roundhill Magnificent Seven ETF is up about 6% year-to-date, while the S&P 500 has gained roughly 12% — Big Tech as a group is underperforming the broader market.
This reflects growing unease over the massive capital spending required for AI infrastructure: the money is going out, but returns have yet to materialize, eroding investors' willingness to pay a premium for mega-cap names.
Whether Apple can sustain its $5 trillion market cap, and whether Alphabet can stabilize amid weakening momentum, are the two key tests for these technical calls.
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