Google stock, Alphabet Inc., (NASDAQ: GOOG) continues to be in a stable uptrend, which began last June. The latest spurt, according to the Fitch analytic group, was triggered by a market reaction to a legal change of leadership in the parent company. The actual founders of the company, Larry Page and Sergey Brin, left their posts as CEO and President of Alphabet, respectively, and transferred the authority to the head of the holding, Sundararajan Pichai.
The positive factors within the company include a statement that Google has started testing its corporate cloud-based gaming streaming service Stadia on various devices. Now, some owners of flagship phones have the opportunity to run software directly on the device.
Many people are predicting a downturn in the markets and economy. The stock prices during this recession drastically diminished for many companies but that was not the case for Google. In 2008, the start of the recession, google’s product value increased by $7; each year since this recession that product price has grown and is foretasted to continue rising for future years. Google also remains a powerful organization because of their efficiency on paying back their debt. Google’s operating income to gross loan ratio is 56 percent. Meaning payment is double the quantity of debt released. So, Google is able to payback back their debt pretty quickly.
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The next publication of the financial statements of the company is scheduled for January 31. According to analysts, earnings per share are expected to be USD 12.56, and total earnings at USD 46.9 billion. However, given the weak dynamics of revenue growth for the past reporting periods, such high expectations raise some doubts. At the beginning of last year, the company’s management noted the high cost of shares, and the split procedure was considered as a possible solution if the price reaches USD 1,500 per share. The target mark has already been almost reached; therefore, decisive action on the split can be expected in the near future.
S&P 500 continues to trade in an uptrend. The market is active in anticipation of the signing of the first part of the trade agreement between the United States and China (it is planned that the US will reduce duties on Chinese goods, and China will increase purchases of US agricultural products). Many experts believe that the new agreement is beneficial to Donald Trump, for whom it is important to retain the benefits received at the very beginning of the election race.
The second positive point that supports stock market quotes is strong reporting of large US companies. It is expected that the coefficient reflecting the price/profit indicator for the S&P 500 index will be more than 18.4, which is several times higher than the average over the past few years. According to forecasts, growth will be recorded in eight areas, led by the healthcare, utilities and communications sectors. The largest decline is expected in the commodity sector, and this is not surprising: oil prices continue to trade at high levels, providing high returns to energy companies.
Oil prices stabilized after the largest drop in the last six months, the value of which reached 13%. Such a decline in quotes was caused by Donald Trump’s statement that the US would not follow an armed response to Iran’s missile attacks on US bases in Iraq limiting itself to introducing another package of sanctions against Iran. The international community took this as a step towards peace in the Middle East considering that nothing threatens oil supplies.
The proximity of signing of the first stage of the US-PRC trade deal, whose procedure is due to take place tomorrow at the White House, also speaks in favor of more risky assets, one of which is USD. Earlier it was reported that negotiations on the second phase of the agreement will begin immediately after signing the first.
Oil prices are expected to be stable this week, and a possible consolidation around USD 58 per barrel looks real. However, reaction to data on Weekly Oil Reserves, which will be published tomorrow, can change the trend.
Google Stock Support and Resistance
The global stock market uptrend continues. As part of the upward channel, Google’s stock price has reached the resistance line and a slight downward correction will be logical. However, the Alligator indicator is in a stable state of purchase. The AO oscillator is also in the growth zone, and there are no prerequisites for the start of a decline.
Resistance levels: 1450.0, 1500.0.
Support levels: 1428.0, 1360.0.
Google Trading Ideas
If the stock reverses and declines, and the price consolidates below the local low at 1428.0, short positions can be opened with the target at 1360.0 and stop loss at 1450.0. If the stock continues growing and the price consolidates above the resistance line at 1450.0, buy positions will be relevant with target at 1500.0. Stop loss can be set below the resistance line at 1420.0.
Implementation time: 7 days and more.
Google Stock Recommendations
Jan-10-20 Initiated Bernstein Outperform
Jan-06-20 Upgrade Pivotal Research Group Hold → Buy $1445 → $1650
Dec-05-19 Upgrade Stifel Hold → Buy
Dec-03-19 Initiated Piper Jaffray Overweight
Oct-29-19 Reiterated Oppenheimer Outperform $1370 → $1530
Jul-26-19 Reiterated The Benchmark Company Buy $1315 → $1360
Jul-26-19 Reiterated BofA/Merrill Buy $1350 → $1450
May-29-19 Initiated Pivotal Research Group Hold
May-15-19 Reiterated Deutsche Bank Buy $1300 → $1400
Apr-30-19 Downgrade Stifel Buy → Hold $1287
Oct-26-18 Reiterated Canaccord Genuity Hold $1170 → $1140
Jul-24-18 Reiterated RBC Capital Mkts Outperform $1285 → $1400
Jul-24-18 Reiterated Oppenheimer Outperform $1350 → $1450
Apr-02-18 Reiterated Pivotal Research Group Hold $1110 → $1040
Jan-30-18 Reiterated Needham Buy $1150 → $1350
Jan-12-18 Reiterated Piper Jaffray Overweight $1150 → $1300
Oct-12-17 Reiterated Pivotal Research Group Hold $940 → $970
Oct-11-17 Reiterated Credit Suisse Outperform $1100 → $1350
Apr-28-17 Reiterated UBS Buy $980 → $1050
Apr-28-17 Reiterated Needham Buy $935 → $1050
Google Stock 1 Day Moving Averages
Name Value Action
Exponential Moving Average (5) 1418.37 Buy
Simple Moving Average (5) 1417.29 Buy
Exponential Moving Average (10) 1398.90 Buy
Simple Moving Average (10) 1388.19 Buy
Exponential Moving Average (20) 1376.69 Buy
Simple Moving Average (20) 1370.45 Buy
Exponential Moving Average (30) 1361.28 Buy
Simple Moving Average (30) 1355.73 Buy
Exponential Moving Average (50) 1336.26 Buy
Simple Moving Average (50) 1334.25 Buy
Exponential Moving Average (100) 1290.38 Buy
Simple Moving Average (100) 1276.42 Buy
Exponential Moving Average (200) 1237.32 Buy
Simple Moving Average (200) 1217.03 Buy
Ichimoku Cloud Base Line (9, 26, 52, 26) 1378.48 Neutral
Volume Weighted Moving Average (20) 1373.76 Buy
Hull Moving Average (9) 1440.94 Sell
Tom, aka T Rex, is seasoned financial pro that cut his teeth on the Chicago trading oil futures in 1995. In less than 3 years he bought his own seat and set up shop on the exchange. For the next 10 years Rex traded his own account and some institutional accounts. In 2017, he decided to move to Florida and focus on educating traders and writing for financial websites.