Alphabet Inc. Stock Poised for Near-Term Positive MovementStockInvest.us, 2 months ago
Alphabet Inc. closed the trading day on September 22, 2023, at a price of \$130.25, down by 0.15%, on a volume of 22.79 million shares. The stock is trading near its 50-day moving average of \$130.65 but significantly above its 200-day moving average of \$110.94, indicating a medium-term bullish trend.
The company's market capitalization stands at \$1.65 trillion, making it one of the largest by market capitalization on the NASDAQ. Alphabet has 12.64 billion shares outstanding with a trailing twelve months' earnings per share (EPS) of \$4.72 and a price-to-earnings ratio of 27.6. This suggests the stock may be slightly overvalued relative to its earnings.
Alphabet is expected to announce its earnings on October 23, 2023, and the discounted cash flow (DCF) analysis suggests a fair value of \$131.91, which is slightly more than the current price.
Short-term technical indicators suggest that the stock has a relative strength index (RSI) of 35, which indicates oversold conditions. Additionally, the moving average convergence divergence (MACD) stands at 2.79 indicating a positive momentum. However, the average true range (ATR) at 2.10 suggests a relatively high level of price volatility.
Regarding the consensus among analysts, the recommendation is to Buy. A total of 34 gave a recommendation: 33 recommended "Buy" and one recommended "Hold".
However, Wall Street is currently concerned with the potential of a broader market crash, following the recent trend of hasty selling. Investors may need to brace for a sustained period of market turbulence.
Technical Analysis Projection
The key support and resistance levels for Alphabet's stock are \$129.78 and \$132.58 respectively. Depending upon market sentiment and broader market factors, the stock may face resistance at \$132.58. However, analysts' high target for the stock is \$190, indicating bullish long-term sentiment towards the stock.
Prediction and Final Evaluation
Given the Relative Strength Index, higher than average price-to-earnings ratio, impending earnings announcement, and DCF fair value, Alphabet's stock seems poised for a near-term positive movement. For the next trading day, September 25, 2023, Alphabet's stock price could rise, trading closer to the DCF fair value of \$131.91.
In the medium term (upcoming week), if the earnings announced on October 23rd meet or exceed market expectations, the stock may test the resistance level of \$132.58.
Based on this analysis, Alphabet is rated as a 'Hold'. This suggestion is arrived at due to the recent news around Alphabet's expansion into AI and the upcoming earnings announcement, balanced against present broader market volatility and the near-term overbought conditions.