Alphabet Inc. (NASDAQ:GOOG) Innovation at a Reasonable Price

Alphabet Inc. (NASDAQ:GOOG) Innovation at a Reasonable Price

Alphabet Inc. (NASDAQ:GOOG) Innovation at a Reasonable Price

Like Apple, Alphabet is an innovative company and its innovative DNA extends beyond its core competency of internet search. Even with a sprawling business model that touches various disruptive themes, such as artificial intelligence, cloud computing, autonomous vehicles and Internet of Things (IoT), Google stock isn’t excessively valued at 22.62x forward earnings.

Alphabet’s artificial intelligence footprint, something that has been around almost as long as the company itself, is something to behold and is likely to serve as a major driver of investor returns in the years to come.

“Across the company, machine learning and artificial intelligence (AI) are increasingly driving many of our latest innovations, from YouTube recommendations to driverless cars to healthcare diagnostics,” .

Academics concur that Alphabet’s artificial intelligence opportunity is massive and potentially lucrative.

“Artificial intelligence has captured the attention of business people, scientists, and engineers worldwide,” . “Across industries leaders are seeking ways to create value through machine learning and other frontier technologies. Companies like Google have made commercial strides into AI—from smart bots to facial recognition to semantic analysis.”

Healthcare and transportation, arenas in which Google dwells, are among the artificial intelligence opportunities that could drive returns in the future.

“If framed correctly, the opportunities for smart applications abound,” said the Harvard researchers. “For example, there’s potential to mitigate climate change via autonomous transportation, or develop better preventative healthcare through predictive modeling.”

Bottom Line on Google Stock

The AI footprint, the move into wearables via the Fitbit acquisition and a burgeoning cloud computing business are among the factors that will drive Google stock and remind investors this company, will appearing almost unwieldy, is well managed.

“As mentioned in our Oct. 28 Alphabet note, we view this as another step by Google to further improve its ecosystem by tapping into what Gartner estimates will be around an $88 billion wearable device market by 2023, growing at a 22% CAGR,” . “According to Strategy Analytics and Counterpoint, Fitbit has a 5%-6% market share in smartwatches, which Gartner sees growing to $35 billion by 2023, from $17 billion this year.”

The cloud computing market is expected to grow by 25% over the next two years and Alphabet is poised to gain share there as well.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 1,221.08.

The projected upper bound is: 1,334.42.

The projected lower bound is: 1,254.57.

The projected closing price is: 1,294.49.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 74.8072. This is not an overbought or oversold reading. The last signal was a sell 5 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 66.28. 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 sell 5 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 165.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 period(s) ago.

MACD

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 0.660 at 1,292.030. Volume was 6% below average (neutral) and Bollinger Bands were 4% wider than normal.

Open     High      Low     Close     Volume___
1,292.8901,298.9301,291.2291,292.030 1,282,711
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,271.64 1,226.92 1,170.74
Volatility: 21 21 30
Volume: 1,499,938 1,301,776 1,436,722

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.

Summary

ALPHABET INC C is currently 10.4% 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 moderate flows of volume into GOOG.O (mildly bullish). Our trend forecasting oscillators are currently bullish on GOOG.O and have had this outlook for the last 14 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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