Alphabet Inc. (NASDAQ:GOOG) company’s ad revenue growth is slowing
Not all is well in the Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) kingdom, and that is why GOOG stock has dropped from $1,300 to below $1,050 over the past several months.
The company’s ad revenue growth is slowing amid less robust growth rates across the entire digital advertising world and rising competition from Amazon (NASDAQ:AMZN). GOOG’s cloud business is slowing, too, largely due to Microsoft (NASDAQ:MSFT) gaining share. Moreover, Alphabet’s margins remain depressed, while its profit growth is slowing and government regulation remains a big threat.
GOOG stock is definitely facing meaningful headwinds. As a result, the recent weakness of GOOG makes sense.
But this weakness is also a long-term buying opportunity.
GOOG Still Has Some Positive Catalysts
In the big picture, Alphabet is still the king of the digital advertising world, and its digital-ad business is still growing at a 20% clip. The company’s cloud business is slowing, but it, too, is expanding by 20% annually and has long-term staying power. Alphabet’s margins are depressed, but they are starting to stabilize, thanks to slower TAC (traffic acquisition cost) growth. The company’s profit growth hasn’t been the best recently, but it’s also improving. And, while regulation is a threat, Google search is the backbone of the global internet, and it’s tough to see regulations changing that anytime soon.
Meanwhile, Alphabet stock has some major growth levers in e-commerce, self-driving, and artificial intelligence that it will gradually pull over the next several years. Considering the huge implications of those drivers, pulling any one of them could provide a huge lift to Alphabet’s growth outlook and to GOOG stock.
Overall, GOOG stock has been weak recently, and with good reason. But, for long term investors, this weakness is an opportunity. Alphabet should remain a growth leader, and as a result, GOOG should be a long-term winner.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 1,138.38.
The projected upper bound is: 1,099.82.
The projected lower bound is: 970.26.
The projected closing price is: 1,035.04.
A black body occurred (because prices closed lower 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 22 white candles and 28 black candles for a net of 6 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 53.4054. This is not an overbought or oversold reading. The last signal was a sell 0 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 40.74. 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 21 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 -76. This is not a topping or bottoming area. The last signal was a buy 4 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 4 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed down -27.520 at 1,038.630. Volume was 10% below average (neutral) and Bollinger Bands were 2% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,061.72 1,127.93 1,123.10
Volatility: 41 38 34
Volume: 1,909,979 1,814,335 1,740,629
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 is currently 7.5% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of GOOG.O (mildly bearish). Our trend forecasting oscillators are currently bearish on GOOG.O and have had this outlook for the last 25 periods.
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