Better than expected Q4 numbers could spark a rally in Alphabet Inc. (NASDAQ:GOOG) stock

Better than expected Q4 numbers could spark a rally in Alphabet Inc. (NASDAQ:GOOG) stock

Better than expected Q4 numbers could spark a rally in Alphabet Inc. (NASDAQ:GOOG) stock

Global internet giant Alphabet (NASDAQ:GOOGL) had a tough run in 2018. Google stock entered the year just under $1,100. It bounced around quite a bit throughout 2018, rising as high as $1,300 and falling as low as $980. Ultimately, though, GOOGL finished the year exactly where it had started the year, at just under $1,100.

There are reasons to believe 2019 will be a much better year for Google stock. There’s also reason to believe the 2019 rally will get started in early February, when Alphabet reports fourth-quarter earnings.

Those numbers should be pretty good given multiple positive operational developments towards the end of 2018, and in the beginning of 2019. Also, headwinds which plagued GOOGL in 2018 are starting to move into the rear-view mirror. This coupling of positive developments and moderating headwinds should lead to strong numbers in early February.

Strong numbers which confirm improving trends will result in two things. First, investor sentiment will improve, and GOOGL’s multiple will expand. Second, analysts will revise 2019 and 2020 EPS estimates higher.

Thus, in 2019, Google should benefit from a double tailwind of multiple expansion and earnings growth. Both of those tailwinds will emerge in early February, making GOOGL look like a compelling buy in late January.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 1,140.73.

The projected lower bound is: 1,009.70.

The projected closing price is: 1,075.21.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.

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.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 54.3288. This is not an overbought or oversold reading. The last signal was a sell 1 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 53.73. 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 68 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 28. This is not a topping or bottoming area. The last signal was a sell 1 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 16 period(s) ago.

Rex Takasugi – TD Profile

ALPHABET INC C closed up 5.050 at 1,075.570. Volume was 48% below average (neutral) and Bollinger Bands were 2% narrower than normal.

Open High Low Close Volume___
1,077.3501,084.9301,059.7501,075.570 966,956

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

Moving Averages: 10-period 50-period 200-period
Close: 1,073.92 1,051.80 1,115.06
Volatility: 27 40 33
Volume: 1,389,481 1,820,949 1,667,056

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 3.5% below its 200-period moving average and is in an upward 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 bullish on GOOG.O and have had this outlook for the last 11 periods.

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