Analysts concerned after Alphabet Inc. (NASDAQ:GOOG) offers increased spending and vague commentary on financial performance
Shares of Alphabet Inc. are falling Tuesday after the company disclosed a sizable increase in spending, prompting a series of questions about the internet giant’s future.
Google-parent Alphabet GOOGL, +0.92% GOOG, +1.16% reported better-than-expected financial results on Monday afternoon, but concerns about the company’s expense outlook seem to be trumping those strong numbers. The stock was down 0.8% in midday trading.
Several analysts argued that the company’s record of vague disclosures isn’t helping to fuel optimism around the stock. “The combination of opaque financial commentary with no official guidance, and a lack of spending discipline, paints a murky profit picture for 2019,” wrote Monness Crespi Hardt and Co. analyst Brian White, who has a buy rating and $1,315 target on the shares.
Morgan Stanley’s Brian Nowak chimed in as well on the topic. “Any stock pressure also reinforces how improved disclosure or transparency from Google could lead to material share-price appreciation,” he wrote. Nowak has an overweight rating and a price target of $1,500 on Alphabet’s shares.
At least 10 analysts dropped their price targets on the stock in response to the earnings report, according to FactSet, while at least two increased targets. Out of 45 analysts that track the stock, 44 consider it the equivalent of a buy, and the average price target Tuesday morning was $1,336.39, an 18% premium from the going rate, FactSet reported.
Alphabet’s stock has climbed 7.2% over the past three months, as the S&P 500 SPX, +0.47% has dropped 0.2%.
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 1,092.47.
The projected upper bound is: 1,213.04.
The projected lower bound is: 1,083.75.
The projected closing price is: 1,148.39.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 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 93.3163. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 65.77. 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 77 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 167.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 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 buy 3 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed up 13.190 at 1,145.990. Volume was 90% above average (neutral) and Bollinger Bands were 10% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,096.61 1,060.83 1,117.51
Volatility: 28 39 33
Volume: 1,616,296 1,821,172 1,670,682
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 2.5% 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 20 periods.
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