Alphabet Inc. (NASDAQ:GOOG) A new global trend
The technology sector has been on a volatile ride of late, driven in large part by the fortunes of some household names. Franklin Equity Group’s Jonathan Curtis believes the sector offers attractive long-term potential. In this article, he champions the contribution of lesser known names and explores the opportunities presented by the rollout of fifth-generation (5G) technology.
A few big names, notably the so-called “FAANGs” (Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Alphabet’s Google (NASDAQ:GOOG) (NASDAQ:GOOGL)), tend to dominate many investors’ perception of the technology sector.
However, there’s more to the technology sector than just those few giants. While we are excited about many developments impacting larger companies, we also have our eyes on some lesser-known companies that are playing an integral role in the delivery of digital transformation.
We’re on the lookout for companies that are integrating new technology, changing their culture and challenging the status quo.
Digital Disruptors Force Legacy Businesses To Adapt
Increasingly, we’re seeing companies across a range of industries turn to artificial intelligence and machine learning solutions in their quest to remain competitive, such as voice recognition apps like Siri or Alexa, or the Netflix recommendation engine. We think that dynamic presents interesting investment opportunities.
Digital transformation is helping a wider array of companies amend existing business processes or create new ones. As investors within the tech space, we are keen to identify digitally-minded businesses outside the information technology sector that have embraced new technology at a faster rate than their peers. That being said, we also think certain companies involved in the commercialization of fifth-generation (5G) broadband cellular network technology could represent some potential opportunities in the longer term.
Beyond 5G Technology
Many commentators have identified the roll-out of 5G mobile data networks as the next big thing for the technology sector globally. We certainly think it could be a game-changer, and we recognize there are several ways investors can approach the potential 5G opportunity.
In our view, the most attractive investment opportunity is in the supply chain for 5G implementation, rather than among telecommunication equipment manufacturers.
For instance, we see potential in the semiconductor space-such as chip and memory manufacturers-whose products are vital for 5G rollout.
We also see potential opportunities among wireless communications infrastructure companies that help 5G carriers distribute their network services out to mobile devices.
Because they control the distribution, these communications tower operators have a good deal of pricing power over the mobile carriers. In our view, tower companies’ business models could become more attractive as the shift towards 5G becomes more apparent.
We recognize too that the evolution of 5G creates further opportunities in the realm of the Internet of Things, the integration of devices into everyday items via wireless internet.
We think the number of devices connected to the internet is likely to rise dramatically in the coming years, thanks to the extra bandwidth and lower latency that 5G offers. With that in mind, we’ve identified some potentially exciting opportunities among companies providing secure enterprise cloud solutions.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1,184.15.
The projected lower bound is: 1,053.29.
The projected closing price is: 1,118.72.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 4 rising windows in the last 50 candles–this makes the current rising window even more bullish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 83.6332. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 2 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 55.85. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 18 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 117.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 15 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed up 10.330 at 1,121.580. Volume was 49% below average (neutral) and Bollinger Bands were 34% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,100.27 1,130.75 1,118.41
Volatility: 23 36 35
Volume: 1,385,828 1,653,876 1,654,809
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
ALPHABET INC C gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
ALPHABET INC C is currently 0.3% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of GOOG.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on GOOG.O and have had this outlook for the last 9 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.
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