Keep Alphabet Inc. (NASDAQ:GOOG) Stock on Your Radar as Markets Continue to Tumble
The coronavirus may have decimated market indices, but how does this factor into future prospects for Alphabet (NASDAQ:GOOG GOOGL)? GOOG stock, a FANG component and de-facto “NASDAQ Blue Chip”, has tumbled in the market maelstrom.
Shares have dropped from above $1500 per share to just over $1000 per share. but the question is, will they fall further? It’s tough to predict whether a bottom is near. Or if the party’s just started.
However, outside of general market action, could the search giant’s shares benefit from flight-to-safety?
With high margins, little debt, and a $120 billion war chest, GOOG stock can more than weather the current storm. Yet, despite valuation falling to more reasonable levels, there could be additional near-term downside risk.
However, all things considered, Alphabet’s current stock price could be a tempting entry point for a long-term investor. Let’s dive in, and see whether now’s the time to buy, or if taking one’s time is the smarter move.
COVID-19 and GOOG Stock
Obviously, the recent outbreak and the economic fallout is on everyone’s mind. But, how does this affect Alphabet’s main revenue stream, online advertising? Atlantic Equities’ James Cordwell recently ran the numbers.
The result? Well, mixed.
The analyst estimated 2020 ad revenue growth could fall into single-digits for both Google and Facebook (NASDAQ:FB), but Cordwell remains optimistic. He sees online advertising seeing less of an impact from this recession than in prior downturns. Also, Cordwell sees the two online ad giants taking greater market share from legacy ad platforms like television.
With this in mind, Cordwell remains bullish on GOOG stock. I share his sentiments. As long as online advertising remains resilient as expected. It seems logical that the recent crisis could be a wash for the space.
Americans may be tightening their belts. But, with millions working from home and avoiding public places, eCommerce could see a boost. This means Google could remain stable, as search ad demand remains strong.
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 1,329.70.
The projected upper bound is: 1,291.66.
The projected lower bound is: 1,021.07.
The projected closing price is: 1,156.37.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white 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 80.4156. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 9 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 44.33. 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 9 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 4. 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 buy 0 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed up 59.260 at 1,161.750. Volume was 85% above average (neutral) and Bollinger Bands were 158% 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: 1,116.36 1,361.45 1,266.34
Volatility: 111 70 42
Volume: 3,834,414 2,400,703 1,612,634
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 8.3% 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 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 22 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.