Alphabet Inc. (NASDAQ:GOOG) posting mixed earnings results for the third quarter
Stock markets continue to trade under a dark cloud of selling pressure.
Technology stalwarts like Alphabet are no exception, and this has placed the company’s quarterly earnings report under a higher level of scrutiny.
Revenue misses for the tech giant’s third-quarter earnings figure have sent share prices into a near-term freefall.
But the validity of these moves remains highly questionable, as performance stability remains evident in several key areas.
Additionally, the influence of a stronger U.S. dollar weighed on quarterly revenues in ways that are not reflective of consumer demand or operational efficiency.
Stock markets continue to trade under a dark cloud of selling pressure, and the S&P 500 is now showing gains of only 1.2% for the year. In all of the recent carnage, some analysts have argued that technology stocks are especially vulnerable to declines, given the extent of their prior bullish rallies. The latest example of this appears to be seen in Alphabet (GOOG)(GOOGL), which has fallen sharply after posting mixed earnings results for the third quarter. This activity has driven the stock into negative territory for the year, and it would now appear that nothing is sacred in tech during the bear market crash of 2018.
For investors, it is important to take a step back and assess what has led up to these events. It can be very easy to initiate knee-jerk reactions which are panic-based and emotional in nature. These types of impulses need to be avoided as much as possible in favor of a sober reflection upon the facts.
During the third quarter, Alphabet posted earnings of $13.06 per share (or $9.19 billion in net income). The figures show a massive 25.3% upside surprise relative to the analyst expectations of $10.42 per share. On an annualized basis, Alphabet’s earnings performance indicates a growth rate of 36.5% (relative to the $6.73 billion or $9.57 per share posted during the third quarter of 2017). On the downside, revenues missed expectations at $33.7 billion. This performance represents a slight disappointment relative to the $34.04 billion analyst consensus. But the initial market reaction has been severe, with the stock falling more than 5% before regaining its footing.
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 1,151.79.
The projected upper bound is: 1,124.99.
The projected lower bound is: 1,012.55.
The projected closing price is: 1,068.77.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
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 40.1341. This is not an overbought or oversold reading. The last signal was a buy 9 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 39.09. 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 10 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 -149.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 1 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 sell 14 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed down -24.100 at 1,071.470. Volume was 172% above average (trending) and Bollinger Bands were 61% wider 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: 1,093.63 1,163.64 1,128.19
Volatility: 48 32 32
Volume: 2,020,906 1,618,930 1,709,330
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 5.0% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of GOOG.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on GOOG.O and have had this outlook for the last 14 periods.