After GOOGL’s sharp drop, RSI is oversold—does this level deserve a planned entry?

This technical pullback triggered by Google’s financing and share issuance warrants a careful breakdown. The current stock price is about $359.5, having fallen significantly from the $410 peak. The stock price has clearly broken below the 20-day EMA of about $382.52 and the 50-day SMA of about $379.12. RSI has dipped to 31.29, entering oversold territory; the stochastic oscillator reads 16.745, also deeply oversold. ADX is 48.367, indicating the current downtrend still has moderate directional strength, and the risk of blindly betting on a rebound is not small.

But the fundamental backdrop remains strong: Google Cloud has backlog orders of $462 billion, nearly doubling compared with three months ago, and demand for AI computing power shows this is not a market bubble. Berkshire Hathaway took part in a private placement at about $350 per share, investing $10 billion, providing a high-confidence bottom signal for the market.

For support, look directly at the $351.30 area of the 200-day SMA, which is very close to Berkshire’s buy price of $351.81, forming an important psychological bottom. If $351 breaks, the next support is at $340–$345. On the resistance side, the first level is $365–$370; the $379–$382 range represents the convergence point of the 50-day SMA and the 20-day EMA—only after regaining it with increased volume can a truly convincing reversal signal be released.

RSI shows oversold conditions, but ADX shows the trend still has strength—this combination suggests you can build positions in stages in the $350–$366 range, but it is not an all-in entry point. Wait for RSI to rebound and confirm, or wait for the price to regain and hold above $370 before chasing on the right side.

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