Alphabet Inc. (NASDAQ:GOOG) steady revenue stream and strong overseas growth
Of all the tech giants that have revolutionized life in the 21st century, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) may be the most pervasive. But for all the attention—and sometimes controversy—it attracts, there are still some aspects of the company that are underrated and may have caused GOOG stock to be undervalued.
Not every company is important enough to be called out by the Vice President of the United States. But on Oct. 4, Mike Pence asked the Silicon Valley titan to stop developing its “Dragonfly” app that would make it easier to track individuals’ internet searches.
Since GOOG is doing very well in Asia, while it continues to grow in the United States and Europe, it’s easy to see why Alphabet’s recent results, including its second-quarter earnings, have been strong. Its upbeat results have enabled GOOG stock to rise nearly 10% since early April, outperforming the S&P 500 by a couple of percentage points.
Adjusting for currency fluctuations, Alphabet’s revenue was up a whopping 23% year-over-year. That increase was noticeably higher than analysts’ consensus estimate of 18% that some had thought was too optimistic.
Can GOOG continue to sustain that level of growth? The company’s revenue growth is as sustainable as anything can be in this unpredictable world. Google gets about 85% of its revenue from advertising. That is a steady revenue stream, given that the company’s name is quite literally synonymous with internet searches, which have become an essential part of daily life.
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 1,156.86.
The projected upper bound is: 1,133.11.
The projected lower bound is: 1,036.52.
The projected closing price is: 1,084.82.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 20 white candles and 30 black candles for a net of 10 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 63.0580. This is not an overbought or oversold reading. The last signal was a buy 3 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 35.56. 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 4 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 -78. This is not a topping or bottoming area. The last signal was a buy 2 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 8 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed down -27.720 at 1,087.970. Volume was 40% above average (neutral) and Bollinger Bands were 60% 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: 1,113.29 1,180.96 1,128.65
Volatility: 42 27 31
Volume: 1,901,542 1,501,503 1,673,873
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 3.6% 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 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 8 periods.
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