Internet content giant and Google parent company Alphabet Inc. (GOOGL) rebounded from bear market territory this week and stayed above my annual value level at $966.02. This is not a call to be bullish in the longer term – it's a call for short-term rally legs over the next two trading days.

Alphabet stock closed Thursday, Dec. 27, at $1,052.90, virtually break-even year to date but deep into correction territory at18.5% below its all-time intraday high of $1,291.44 set on July 27. The stock is 7.7% above its 2018 low of $977.66 set on Dec. 24. The shares were in bear market territory at the low.

Alphabet does not report earnings until Feb. 7, 2019, and the stock is reasonably priced with a P/E ratio of 22.16, which is not bad for a momentum stock. The company does not offer a dividend, so investors are looking for a return of rising momentum before adding to long positions or opening a fresh long.

Some on Wall Street say that Alphabet is feeling the pinch of direct competition from Amazon.com, Inc.'s (AMZN) fast-growing advertising business. Investors will also be focusing on Google's cloud business, hardware offerings, search and YouTube. During the recent baseball World Series, the advertisements for the Google Pixel 3 smartphone were impressive, and YouTube participated in the programming.

The daily chart for Alphabet

Daily technical chart showing the share price performance of Alphabet Inc. (GOOGL)
MetaStock Xenith

The daily chart for Alphabet shows that the stock held its 200-day simple moving average (SMA) several times between Feb. 9 and May 4. When the stock set its all-time intraday high of $1,291.44 on July 27, it turned out to be a "key reversal" day, as the close that day was below the July 26 low of $1,263.00.

On Oct. 10, the stock broke below the 200-day SMA. Then, on Nov. 16, a "death cross" formed, with the 50-day SMA falling below the 200-day, indicating that lower prices would follow. A test of the 200-day SMA at $1,129.91 was an opportunity to reduce holdings. The stock set its 2018 low of $977.66 on Dec. 24, which was above my annual value level at $966.02 shown on the horizontal line at the base of the chart. The upside over the next two days is to my semiannual pivot at $1,104.14, which is the middle horizontal line.

The weekly chart for Alphabet

Weekly technical chart showing the share price performance of Alphabet Inc. (GOOGL)
MetaStock Xenith

The weekly chart for Alphabet is negative, with the stock below its five-week modified moving average of $1,060.48. The 200-week SMA, or "reversion to the mean," is at $874.22, which is the downside risk in 2019. The 12 x 3 x 3 weekly slow stochastic reading is projected to decline to 22.56 this week, down from 23.11 on Dec. 21.

Given these charts and analysis, investors should buy Alphabet shares on weakness to my annual value level of $966.02 and add to positions on weakness to the "reversion to the mean" at $874.72. Reduce holdings on strength to my semiannual pivot of $1,101.14 and the 200-day SMA at $1,124.03.

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.