On Tuesday of Mother's company Google Alphabet (NASDAQ: GOOG) will have to publish a financial report for the 4th quarter. We believe that, according to the results of its release, its shares will grow significantly.
The average analysts forecast suggests that profit per share in annual terms increased from $ 15.35 to $ 15.7. However, it is even more impressive expectations regarding revenue: it is likely to be $ 52.89 billion (against 46.98 billion for the same period last year). The fact that Google (NASDAQ: GOOGL) manages to grow in the conditions of the strongest crisis in the field of health of the last century, says for himself.
According to forecasts, 2021 marks the growth of the advertising segment of the largest Internet search engine. This prompted analysts with Wall Street strongly recommend alphabet shares to purchase.
JPMorgan Dag Anchor Anmuth Expects Google search revenue growth by 19%, and YouTube's advertising business is 38%. Anmut also believes that the cloud division of the technological giant will finally approach the threshold of profitability (after many and spent years of development). It also expects the further commercialization of the Waymo - a subsidiary of Alphabet, engaged in the technology of unmanned vehicles.
From a technical point of view of "bearish" the model turned.
Shares were traded in accordance with the "Head and Shoulders" model (H & S), demonstrating the slowdown in the ascending trend, which was then replaced by descending. However, on January 20, the price jumped by 5.4%, violating the overall picture. This step caused bewilderment from analysts who could not find a specific reason for a burst.
Although that day, the news regarding the company was ambiguous, most likely there was no direct catalyst. Some market participants note the NetFlix financial results published on the eve (NASDAQ: NFLX) (which surpassed analysts' expectations) as the driver of the entire technological sector, as they strengthened the optimism of investors.
Then the environment came, and new reports on the possible tightening of control by the regulatory bodies of Europe were putting pressure on shares, which fell by 4.5%. Failure has been postponed paper and other technological companies.
Then the price found support for sure at the top of the failed H & S model. Here the nature of supply and demand, their occurrence and change are perfectly illustrated. The same thing happened from September 2, when the resistance that coincided with the line of neck model H & S was gradually turned into support.
Thus, we consider a recent sale as part of the integrity test of H & S. As soon as he proves the ability to withstand pressure, the price must bounce and rise even higher.
Moreover, the rollback itself occurs within the falling flag, which has a "bullish" character after the previous rally by 12.4% in just four trading days. If demand really exceeds the proposal and it will be capable of calling an upward breakdown, the flag will form its own ascending impulse, enhancing the ascending pressure from the H & S side, which has become a vertex model in the continuation pattern.
Trading strategies for the purchase
Conservative Traders should wait for a new maximum that confirms the resumption of the upstream trend.
Moderate traders will wait for an upward breakdown of the falling flag.
Aggressive traders can open long positions now, provided that they realize and take all risks.
An example of a position
- Login: $ 1,835
- Stop Loss: $ 1,800
- Risk: $ 35
- Target: $ 2,000
- Profit: $ 165
- Risk ratio to profits: 1: 5
Note Author: This is just an example of a position; It does not replace a full-fledged analysis given in the article. Keep in mind that we are not "prophets" and do not know the future. We are only trying to explain the market dynamics and determine the most likely price trajectory. Finally, budget constraints may affect the results of the transaction, your temperament, as well as the selected time range. Adapt a trading plan for your personal circumstances. If you do not know how to do it, train in small positions.
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