Alphabet Inc. (NASDAQ:GOOG) Stock Too Big (and Important) to Break Up

Alphabet Inc. (NASDAQ:GOOG) Stock Too Big (and Important) to Break Up

Alphabet Inc. (NASDAQ:GOOG) Stock Too Big (and Important) to Break Up

Anyone who remembers the 2008 financial collapse and the subsequent federal actions likely have a bitter taste in their mouths. Rather than give the American people a break, the government decided to help out major corporations; the very ones that almost destroyed global markets.

We all learned a phrase in that period: too big to fail.

But when it comes to GOOGL stock and its possible negative intervention, we’ll likely learn another similar phrase: too big to break up.

Let me just weasel down my argument slightly: no one can tell what the DOJ will do for sure. But with that basic caveat aside, I’m not losing any sleep over it. Neither should you, even if you’re heavily invested in Google stock.

First, we can rely on history to help us navigate the intermediate term. The feds rarely break up big companies. Famously – or infamously, depending on your perspective – the government went after Microsoft (NASDAQ: MSFT ). The DOJ won a preliminary victory in 2000, but Microsoft appealed.

Microsoft is very much with us today, giant reach and all. But the overriding reason why I’m confident that Alphabet will remain as it is centers on politics.

In a recent interview with CNBC, President Trump criticized EU fines against American tech firms, specifically naming Facebook (NASDAQ: FB ) and Apple (NASDAQ: AAPL ). Regarding the sanctions, the President stated, ” … we should be doing this. They’re our companies.”

I find this sudden defense of American tech quite telling. Prior to this dust-up, Trump had no problems blasting any negative news about him as “fake news.” Additionally, conservatives have accused Google of political bias .

But when the EU takes American tech to task, out comes the nationalistic tribalism. But Trump is right because Google stock is too important right now.

Tense Environment Favors GOOGL Stock

Obviously, Alphabet’s days as a startup company are long gone, as GOOGL stock’s market cap attests to. Today, it represents indelible roles in our professional and personal lives.

Moreover, Google is the one of the few things that we can do right, right now. We can’t make cars. We’ve lost respect from the international community. Great swathes of America’s citizenry hate each other. And we’d rather spend trillions killing people than billions educating our own children.

In so many ways, America is a mess. As crazy as it sounds, Alphabet is the company that we have that we don’t deserve.

Now, it’s more vital than ever to keep it the dominant force that it is. Those synergies that I mentioned don’t just exist to make cute little consumer products. Instead, they present formidable challenges to China’s and Russia’s unambiguous ambitions to overtake us in the technological realm.

I know. This is just another example of the big wigs getting away with bloody murder. But with so many adversarial elements working against us, this isn’t the time to grow morals against Google stock.

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 1,139.98.

The projected upper bound is: 1,138.83.

The projected lower bound is: 1,010.54.

The projected closing price is: 1,074.68.

Candlesticks

A black body occurred (because prices closed lower 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 29 white candles and 21 black candles for a net of 8 white candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

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 70.0386. This is not an overbought or oversold reading. The last signal was a buy 4 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 39.41. 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 3 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 -27. This is not a topping or bottoming area. The last signal was a buy 3 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 0 period(s) ago.

Rex Takasugi – TD Profile

ALPHABET INC C closed down -1.690 at 1,077.030. Volume was 31% below average (neutral) and Bollinger Bands were 58% wider than normal.

Open High Low Close Volume___
1,078.0001,080.9301,067.5401,077.030 1,061,255

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1,069.96 1,167.02 1,125.90
Volatility: 43 35 35
Volume: 2,006,075 1,550,646 1,661,545

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 4.3% 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 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 28 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH