Alphabet Inc. (NASDAQ:GOOG) strong Q3 numbers could end the recent sell-off
As the stock market has tumbled over the past few weeks, internet giant Alphabet (NASDAQ:GOOG) has tumbled with it. As of this writing, GOOG stock is roughly 15% off recent highs, marking its biggest sell-off since early 2015.
The recent sell-off has plunged Google stock into value territory. This is a company that grew revenues by over 20% last quarter (and which has grown revenues by over 20% for several consecutive quarters). Yet, Google trades at just 25X forward earnings, which is cheap for a perennial 20%-grower.
But, if anything is clear lately, it is that this stock market is spooked. Between rising interest rates, tariffs, slowing economic growth, peak margins, regulation and debt, investors aren’t willing to push stocks higher just because they are cheap. Instead, stocks need to prove that they deserve to go higher.
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 1,152.76.
The projected upper bound is: 1,099.58.
The projected lower bound is: 994.19.
The projected closing price is: 1,046.88.
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 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with ALPHABET INC C), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 32.4637. This is not an overbought or oversold reading. The last signal was a buy 7 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 31.09. 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 8 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 -137.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 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 12 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed down -52.980 at 1,050.710. Volume was 32% above average (neutral) and Bollinger Bands were 73% 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: 1,095.86 1,168.72 1,128.40
Volatility: 42 30 31
Volume: 1,852,706 1,547,701 1,685,769
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 6.9% 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 12 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.