What Could Derail Alphabet Inc. (NASDAQ:GOOG) Stock?

What Could Derail Alphabet Inc. (NASDAQ:GOOG) Stock?

What Could Derail Alphabet Inc. (NASDAQ:GOOG) Stock?

On Feb. 4, when Google came out with Q4 2018 earnings, it raised a few eyebrows as the company revealed declining advertising prices and rising costs. Investors are especially concerned that the group’s core advertising business is likely to be at a plateau. They are now watching Amazon’s increased presence in the market closely.

In 2018, Google’s ad business grew 20% and was outpaced by both Facebook at 30%  and  Amazon at 95% . In other words, GOOGL is likely to face more competition in the future from Amazon, Facebook, Baidu and several other competitors. But it would be premature to assume that the tech giant is slowing down in a manner that should alarm long-term investors.

The group also reported an operating margin of 21% for Q4 2018, lower than the 22% expected by analysts. Following the earnings report, the stock initially sold off, but only to recover in the following weeks. In other words, if Google investors do not like the earnings result of April 29, there might be a similar price pressure and reaction to the downside.

Because of the recent impressive run-up in the price of Alphabet stock, short-term technical indicators have become somewhat over-extended. Investors who pay attention to short-term oscillators should note that Google’s technical message has also become “overbought.”

In the next two weeks, GOOGL stock could trade sideways and even have a pullback toward the $1,180 level or even the $1,170 level, where the stock is likely to find major support.

Google stock’s beta is 1.06, which means its volatility on average mimics that of the broader market. Therefore, if other big tech names or the broader market declines as the companies release earnings, the GOOGL stock price may also be adversely affected.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 1,266.74.

The projected lower bound is: 1,191.30.

The projected closing price is: 1,229.02.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 91.9913. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 5 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 65.87. 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 sell 17 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 135.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 11 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 up 6.030 at 1,227.130. Volume was 44% below average (neutral) and Bollinger Bands were 28% narrower than normal.

Open High Low Close Volume___
1,225.0001,230.8201,220.1201,227.130 856,304

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1,210.20 1,163.74 1,134.88
Volatility: 10 21 32
Volume: 902,497 1,353,212 1,594,271

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 8.1% above its 200-period moving average and is in an upward trend. Volatility is low 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 31 periods.

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