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Penny Stocks Struggle In November, Creating Opportunity For Gains

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Penny stocks weakened beginning in October, with market players focusing on tax cut legislation hoping to boost blue-chip earnings in upcoming quarters, according to the Investopedia Stocks to Watch for November. The Russell-2000 small-cap index suffered, while the S&P 500 and Nasdaq Composite rose to all-time highs.

Speculative fervor through year’s end is expected to push penny stocks, although improved returns may need to wait until the 2018 January Effect.

Plug Power Inc. had the best group performance in October, lifting more than 18% to a 2-year high, while other picks built basing patterns that signal a balance between buyers and sellers. Such issues are expected to gain ground as market players take profits in tax-sensitive blue chips and move into other opportunities.

Biotech stocks appeared to have topped out for the year after Celgene Corp. triggered a broad-based decline after withdrawing a critical drug application. As a result, the November list focuses on suffering technology stocks that could take advantage of broad fourth-quarter market leadership.

The top three penny stocks in November returned from the October list.

1. Plug Power, Inc. (PLUG)

Source: Investopedia

Plug Power, Inc., a manufacturer of fuel cells, rose from number seven in October to lead the November list.

The company sold off from a split-adjusted $1,565 in 2000 to an all-time low at 12 cents in 2013. The stock turned higher in March 2014, then stalled at $11.72 before falling to 83 cents in March 2017.

In the last seven months, the price spiked to $2.70, before suffering another fall. A breakout should target the May 2014 low at $3.65, which would mark a high percentage rally from the current level.

The company delivered a record third quarter this year, deploying nine GenKey sites, comprising 2,753 GenDrive units, and a unit increase of over 200% from the previous quarterly record.

Fulfillment of multi-site deals announced in the second and third quarters with Amazon and Walmart comprised the majority of order volume for the third quarter.

The company continued the expansion of its blue-chip customer base, successfully securing contracts with two large manufacturing clients in the U.S. automotive industry and one new customer in Europe. It completed $44 million in new bookings, bringing the year-to-date total to nearly $160 million.

2. MicroVision, Inc. (MVIS)

Source: MicroVision

MicroVision, Inc., a provider of ultra-miniature projection display and sensing technology, rose from the number 9 spot in October to number two in November.

The stock topped out at a split-adjusted $548 in 2000 before entering a downtrend that continued into a 2012 low at $1.11.

A 2013 bounce to $3.49 carved resistance, ahead of multiple reversals that have outlined a rectangular basing pattern. The stock rebounded in October 2016, entering an uptrend that has reached the upper half of its persistent trading range.

The stock broke out to a 22-month high in September and has since settled near $2.75, signaling an upside that could reach the 2015 high at $4.23.

The company in August sold 1.5 million unregistered shares to a private investor who is also a current shareholder at a price of $2.10 per share, for aggregate consideration of $3.15 million. MicroVision intends to use the proceeds from the issuance for general corporate purposes.

MicroVision’s display and sensing solution can be adapted to an array of applications and form factors. The company’s business model and product line offering includes display and sensing engines, licensing its patented technology and selling components to licensees for incorporation into their scanning engines.

In September, MicroVision and WPG Holdings, a distributor of semiconductor components in Asia, entered into an agreement for distribution of MicroVision’s line of PicoP scanning engines across Asia.

3. BioDelivery Science International, Inc. (BDSI)

Source: Investopedia

BioDelivery Science International, Inc. rose from the number 10 spot in October to the number three spot in November.

The stock broke above 7-year resistance at $8.26 in 2014, then rallied to an all-time high of $18.48 a few months later. A pullback in 2015 triggered a failed breakout, delivering a decline that continued into a November 4-year low at $1.50.

The stock tested that level in April 2017 and turned higher, supporting an uptrend to a 52-week high oof $3.60 in July. The stock fell in September, finding support at the 200-day EMA. It could bounce back to the third quarter high.

The company announced in September that Health Canada granted market authorization to formally transfer the Drug Identification Number (DIN) ownership of Belbuca (buprenorphine) buccal film in Canada to BDSI’s commercial partner, Purdue Pharma in Canada. This approval triggers a milestone payment to BDSI.

Belbua incorporates BDSI’s BioErodible MucoAdhesive (BEMA) drug delivery technology and is the only long-acting opioid that uses novel buccal film technology to deliver buprenorphine for appropriate patients living with chronic pain.

Belbuca was approved in Canada in June 2017 for the management of pain severe enough to require daily, continuous, long-term treatment and that is opioid-responsive and for which alternative options are inadequate.

4. Lightpath Technologies, Inc. (LPTH)

Source: Investopedia

Lightpath Technologies, Inc., a provider of optics, photonics and infrared solutions for the industrial, defense, telecommunications, testing and measurement, and medical industries, hit an all-time low at 30 cents in February of 2009 after a multi-year fall that began with the dot.com bubble in 2000.

The stock bounced to $3.67 a few months later, establishing a resistance level that lost in breakout attempts in 2010, 2013 and 2016.

An upturn in December 2016 hit another barrier in March 2017, giving way to a rounded base followed by an October breakout. The bullish price action opens the door to potentially rapid gains into 2006 resistance at $7.87.

Revenue for the first quarter of fiscal 2018 was approximately $7.6 million, an increase of approximately $2.6 million, or 51%, as compared to the same period of the prior fiscal year. The increase from the first quarter of the prior fiscal year is attributable to an approximately $3.1 million increase, or 579%, in revenues generated by infrared products.

Total cost as a percentage of revenue continues to decline, improving to 41% in the first quarter of fiscal 2018, compared to 49% in the first quarter last year.

Net income for fiscal 2018 first quarter was approximately $218,000, compared to approximately $140,000 for the first quarter of fiscal 2017.

5. Medical Transcription Billing Corp. (MTBC)

Source: Investopedia

Medical Transcription Billing Corp., a healthcare information technology company that provides a fully integrated suite of proprietary web-based solutions, together with related business services, to healthcare providers practicing in ambulatory care settings, went public in July 2014 at $5.00 and suffered an immediate downtrend that continued to the April 2017 all-time low at 29 cents.

The stock improved a few sessions later, topping out at $3.84 and falling into a broad basing pattern at the 200-day EMA.

The stock bounced off that level in early October, lifting to $5.44 and pulling back in a shallow trading range with support at $2.40. A breakout through the range top could build momentum buying interest that could lift the stock into the IPO print.

The company recently reaffirmed its 2017 revenue guidance of $31 million to $32 million, representing year-over-year revenue growth of approximately 30%. The recent signing of the largest client in the history positions MTBC for additional revenue growth in 2018.

During fourth quarter 2017, the company anticipates reporting record adjusted EBITDA in excess of $1 million for the quarter, together with continued improvement in GAAP net income and positive cash from operations.

6. Mannkind Corp. (MNKD)

Source: Investopedia

Mannkind, which focuses on the development and commercialization of inhaled therapeutic products for patients with diseases such as diabetes and pulmonary arterial hypertension, entered a shallow but persistent downtrend in 2004, posting a series of lower highs into 2015. Then the bottom dropped out, dumping the stock through 2012 support at $8.00 into a May 2017 all-time low at 67 cents.

The stock built a 3-month basing pattern above that price level and took off in a new uptrend that hit a 17-month high at $6.96 on October 10. The stock has since been pulling back and could reach strong support between $2.20 and $2.50, offering a low-risk trade entry ahead of a high bounce.

For the third quarter of 2017, net revenue for the company’s flagship Afrezza product grew 28% to $2 million, compared to the second quarter.

As of Sept. 30, 2017, the amount of Afrezza shipped to the wholesale and retail channels, but not yet recognized as revenue, was $3 million, an increase of $0.4 million from June 30, 2017.

For the nine months ended Sept. 30, 2017, total net revenue of $7.2 million was comprised of $4.7 million of Afrezza net sales, $1.7 million from the net sales of surplus bulk insulin to a third party, $0.6 million from the sale of certain oncology intellectual property, and $0.2 million from collaboration net revenue.

7. Kingold Jewelry, Inc. (KGJI)

Source: Investopedia

Kingold Jewelry, Inc., one of China’s leading designers and manufacturers of 24-karat gold jewelry, ornaments, and investment-oriented products, posted an all-time high of $11.95 in 2010, then fell into a decline that ended at 88 cents in 2011.

The stock broke that support level in the second half of 2015, falling to an all-time low at 49 cents, then turned higher in a recovery wave that remounted broken support. This launched March 2016 buying signals, delivering an advance to a 4-year high at $2.84 in August 2016.

The stock carved a higher low in March 2017 and is now testing multi-year resistance, with a breakout above the 2016 high favoring upside that could reach $7.00.

For the three months ended Sept. 30, 2017, the company sold a total of 30.1 metric tons of gold, of which branded production was 14.6 metric tons, representing 48.6% of total gold sold, and customized production was 15.5 metric tons, representing 51.4% of total gold sold in the third quarter of 2017.

In the third quarter of 2016, the company sold a total of 20.6 metric tons, of which branded production was 10 metric tons, or 48.3% of the total gold sold, and customized production was 10.6 metric tons, or 51.7% of total gold sold.

For the nine months ended Sept. 30, 2017, the company sold a total of 72.2 metric tons of gold, of which branded production was 34.7 metric tons, representing 48.1% of total gold sold, and customized production was 37.5 metric tons, representing 51.9% of total gold sold for the period.

In the nine months ended Sept. 30, 2016, the company sold a total of 55.7 metric tons, of which branded production was 28.6 metric tons, or 51.4% of the total gold sold, and customized production was 27.1 metric tons, or 48.6% of total gold sold.

8. Alaska Communications Systems Group, Inc. (ALSK)

Source: Investopedia

Alaska Communications Systems Group, Inc., a provider of advanced broadband and managed IT services for businesses and consumers in Alaska, topped out in the upper teens in 2007, then began a downtrend that found support near $5.00 in 2009. The stock then broke that low in 2011, falling into a test of the 2002 low near $1.50.

The stock then built a 5-year basing pattern at that level and is now trading near a 2-year high. Its 2015 resistance around $2.50 marks the final barrier, ahead of a rally that tests long-term range resistance at $3.90, which it posted in 2013.

The buying impulse could offer high percentage gains.

Total revenue for the third quarter increased to $56.7 million, up 0.4% from $56.5 million.

Total broadband revenue reached $31.3 million, representing 55.3% of total revenue and up 6.8% from $29.4 million.

Operating income for the quarter was $3.5 million, compared to $4.1 million.
Net income was $0.3 million in both periods.

Net cash provided by operating activities was $8.6 million for the third quarter, compared to $9.5 million.

Capital expenditures were $13.5 million for the quarter, compared to $8.7 million.

9. Limelight Networks, Inc. (LLNW)

Source: Investopedia

Limelight Networks, Inc., a digital content delivery provider, ended a decline at $1.75 in 2008, then bounced to $8.97 in 2010. It returned to support in 2011 before breaking down four years later, dropping to an all-time low at 90 cents in February 2016.

The stock remounted broken support after the presidential election, beginning an uptrend that has reached a 6-year high of $5.18. The October breakout above the June 2015 high of $4.43 will likely get tested in coming weeks, with a pullback as low as $3.50 offering a buying opportunity, ahead of a trend advance near the 2010 high around $9.00.

Revenue for the third quarter was $46.1 million, the highest in 19 quarters, up 17% year over year.

GAAP gross margin was 48.4%, the highest in company history.

Gross margin expanded by 730 basis points year over year. Cash gross margin of 58.9% was the highest since 2008.

Non-GAAP net income was $2.2 million, the highest third quarter since 2007.

Adjusted EBITDA was $7.4 million, the highest third quarter in company history.

10. Sierra Oncology, Inc. (SRRA)

Source: Investopedia

Sierra Oncology, Inc., a clinical stage drug development company focused on advancing next-generation DNA damage response therapeutics for the treatment of patients with cancer, went public near $29 in July 2015, then began a downtrend that continued through a June 2017 all-time low of $1.10.

The stock turned higher in July, hitting the 200-day EMA in October and breaking out shortly after, marking the first time in the stock’s public history it closed above this long-term barrier.

An extended testing period could follow, with pullbacks to new support between $1.75 and $2.00 offering low-risk buying opportunities, ahead of penetration into the unfilled June 2016 gap between $3.00 and $6.20.

For the three months ended Sept. 30, 2017, Sierra incurred a net loss of $10 million compared to a net loss of $15.2 million for the three months ended Sept. 30, 2016. For the nine months ended Sept. 30, 2017, Sierra incurred a net loss of $31.4 million compared to a net loss of $38.6 million for the nine months ended Sept. 30, 2016.

Cash and cash equivalents totaled $107.8 million as of Sept. 30, 2017, compared to $116.7 million as of June 30, 2017, and $109.0 million as of Dec. 31, 2016. The company believes that its existing cash and cash equivalents will be sufficient to fund current operating plans through approximately mid-2019.

On Sept. 30, 2017, there were 52,268,443 shares of common stock issued and outstanding, and stock options to purchase 7,685,449 shares of common stock issued and outstanding.

The November penny stock watch list provides a balance between junior biotech and depressed technology plays, with multi-week basing patterns offering low-risk buying opportunities for patient market players.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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Analysis

Waiting for the Costco Earnings Report

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

Retail companies are among the best investment choices right before the New Year. Let’s see whether it is really true by analyzing Costco, a retail company whose Q4 earnings report is due on Dec 13.

Costco Wholesale Corporation (NASDAQ: COST) is the largest self-service warehouse chain across the globe and the fifth retail company in the US with the most sales. The company sells domestic appliances, foods, chemicals and cleaning agents, clothes, consumer electronics, etc. There is a loyalty program, and members get discounts. Among the members, around 90% are active customers. Costco is conquering the e-commerce world, too, but online sales contribute just 4% to the entire revenue, so the potential here is great.

The company buys products right from the manufacturers and sends them to warehouses, where they are sold to consumers. This saves time and money on multi-level distribution while maximizing the turnover and sales. Currently, there are 768 Costco warehouses in the world, including 533 in the US, 10 in Canada, 39 in Mexico, 28 in the UK, 26 in Japan, 15 in South Korea, 13 in Taiwan, 10 in Australia, two in Spain, and one in France and Iceland. With Costco stock being quite choppy, it has still been a safe haven for most investors, as both the stock price and the dividends have been growing steadily. Over the last 24 months, Costco was better than such competition as Target Corporation (NYSE: TGT), Kroger (NYSE: KR), and Walmart (NYSE: WMT), performing even better than S&P 500.

Costco earnings are season-based, yet its overall trend is ascending.

The debt to equity ratio is under 1.00, while the shorts are just 1.20%. Costco is interesting for investors mostly because of its dividends it’s been paying for over 15 years. In 2004, one share paid $0.10, while in 2018 it is $0.57. The share price also rose considerably, from $40 to $240, which was a great profit for long-term investors (6x+).

In November, retail sales amounted to $12.77B, which is 9.80% more than 12 months ago. The Q4 earnings report may be positive as well. Kroger (NYSE: KR), which had already reported its earnings, exceeded analysts’ expectations, which proves Costco’s report may trigger the same effect.

Fundamentally, there are no negative factors across the board, while, technically, one may want to wait for a better chance that will surely come. The report due this week is 90% likely to exceed expectations, that will push the stock upwards in the short term. However, in W1, one can see the stock has been growing abnormally since June and is well above the 200-day SMA. This is usually followed with an appropriate correction. Besides, when the stock hit $250, its volatility increased.

In terms of candlestick analysis, there are two engulfing patterns, which means the price may start falling soon. It may well test $200 and then go up again, in case there’s enough volume coming from the investors’ interest.

On D1, the stock may rise in the short term because of the good earnings report, as mentioned earlier. This is confirmed by both the support at $218 and the increase in volume. This increase, however, is becoming more and more humble over time. Thus, in case $218 gets broken out, the price may go down, which is confirmed with W1 chart. Buying COST right now expecting a good earnings report on Dec 13 is risky.

The price may rise only in case the report beats expectations, though; otherwise, the stock may fall down quickly to reach $200.

Overall, trading Costco straight away is not the best idea and will suit only those who are hunting for adrenaline. The company looks well attractive for a long-term investment next year, but waiting for a better price is the best thing you can do.

Costco is popular with hedge fund managers, too. As of late Q3, 39 hedge funds had it, including Warren Buffett’s Berkshire Hathaway, with Costco shares worth over $1B.

The P/E is 31.50, which means you will need quite a lot of time for your investment to prove profitable (Apple’s P/E, for instance, is 13.87). Thus, it’s better to wait until the hype comes down, and only then take a long position on Costco Wholesale Corporation.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held Company for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 21 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Analysis

General Motors Fires 27,000 People, Stock Jumps by 5%

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

In early November, we commented on GM, arguing that the stock may reach $40. Not much time has passed, and yet many key events occurred, which increased the volatility in General Motors’ stock. Currently, any major rise is unlikely, as Donald Trump is now taking part in this.

Until recently, things were quite in line with the technical analysis, with the stock correcting to $33.80 and then going up to reach $40.

See the prediction chart we made on Nov 2, below:

On Nov 26, however, GM announced its cost reduction campaign that included firing up to 15% of the employees and around 25% of the management, as well as closing the factories in Michigan, Maryland, and Ohio in the US, and Ontario, Canada.

This was very bad news for the families of the fired employees, but the investors liked it, which pushed the stock up by 5% within a single trading session.

This job cut is of course not in line with Trump’s policy; while the US president is trying to bring the manufacturing back to the US by cutting the tax rates, GM is closing the US based factories, while still maintaining those in Mexico and China. Trump finally said the US government might cut off the tax exemptions for GM,

And this can be well understood. This is not only about the job cut. In 2009, the US government paid $30B just to save the company, which then went public right after bankruptcy. Now, 9 years later, GM is closing its US based factories, but still maintains those in Mexico, where the local government also took part in rescuing the company.

GM reacted on the president’s words with a comment that the trade wars led by Trump made the steel and aluminum import more expensive, which meant the exported GM products were no longer as competitive as before. The major reason lies, however, in bad sales of automobiles. The Q3 earnings report was good, but not because sales were high; rather, it was because car prices went up.

By cutting production, GM is going to save up around $6B, thus doubling its investment into electric car development, including driverless ones.

The only company that wants to increase the manufacturing capacity in the US is Tesla, and, for it, the GM news is very good, as the company may buy the factories being closed and start producing Tesla cars there. This made the Tesla stock rise by over 1%. It would rise much higher in case the decision by GM was final, but it is not.

GM may still keep the US based factories, closing only those in South Korea next year. However, it remains to be seen whether economic and social pressure will get GM to reverse its decision or prolong its factories in North America.

If this is the case, it will be a win-win, as investors will get a higher stock price, the government will keep the jobs, and GM will get additional privileges.

However, GM may still close the US factories, and in this case, nothing may be predicted for sure. Trump’s policy is well unpredictable anyway, and his threats on GM losing its tax exemption privileges may come true. GM will anyways get the positive effect of the factories closing in the short term, but, in a longer term, the company’s activities in the US may suffer a lot. In this case, everything will depend on the factories in the rest of the world, where GM has better conditions.

Thus, fundamentally, the outlook is uncertain and somewhat negative. Let’s see what we can do here with some tech analysis.

Support and resistance levels are key here. The resistance at $37 formed after the earnings report and was active for around a month. Over this time, a key support appeared at $34, then other support levels formed at $35 and $36, which finally broke out the resistance at $37.

It was first broken out when the job cut news came in, but then Trump’s criticism made the price correct; still, it was soon back near $37.

Thus, the report led to a high demand for GM shares, which was followed by a consolidation, as all positions had been taken and the market needed new buyers. Nobody wanted to buy at $37, though, so the price pulled back to $34, where it actually had been before the report came out.

This motivated investors to buy at this good price, and the stock went up quickly.

While the price was going up, new support levels were being formed, which could signal an uptrend. A new support was formed at around $35, which means the investors were no longer expecting any major pullbacks.

When the news on GM job cut came out, new buyers jumped in, which pushed the stock over $38. Those who were late to buy were waiting for a pullback to buy at a better price, which formed another support at $36. The price then went up to $37, where it is currently now.

All this means is that investors have been adding long positions in GM over the last two months, the short float is very low, just 1.99%.

A large amount of longs has a drawback: in case most investors decide to quit, this will lead to a sharp decline. Thus, it is important to find the expected exit point.

In order to find it, one should determine when the stock became popular. This can be easily found at the moment when the earnings report came in.

This particular price level, $33, is a good stop loss; right here, the investors may stop expecting the price to rise and start closing their positions.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 21 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Stock Picks

Stock Pick: Alphabet Inc. (Parent Company of Google)

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Alphabet Incorporated (GOOGL) is a company that needs no introduction. The multinational conglomerate was established through the corporate restructuring of Google in October 2015. With the reorganization, Alphabet has created two segments: Google and Other Bets. Google focuses on internet products such as YouTube, Search Ads, Google Play and others while Other Bets specializes in selling internet and television services. The company had a net income of $12.662 billion in 2017.

Technical Analysis of Alphabet Inc. (GOOGL)

GOOGL has been correcting after posting an all-time high of $1,291.44 in July 2018. At that price level, the stock showed signs of bullish exhaustion. First, GOOGL had five attempts to get a weekly close above $1,254. However, each one failed because the volume was anemic. In addition, a long bearish divergence was spotted on the weekly RSI. As volume and momentum faded, price eventually followed.

Nevertheless, the pullback is giving us an opportunity to buy at a firm support level.

Technical analysis shows that GOOGL is headed to meet support of $995. This support level is strong as it used to be a firm monthly resistance back in May 2017. Bulls struggled to breach this area but they finally did it in October 2017. After that, the support was retested in April 2018. The retest led to the rally to the all-time high of $1,291.44.

With the S&P showing signs of weakness, we will just play the bounce to be on the safe side. Be sure to lock in profits once targets are reached.

Fundamental Analysis of Alphabet Inc. (GOOGL)

On top of our technical analysis, fundamental analysis also supports our short-term bullish view.

The parent-company Alphabet Inc. posted its third-quarter figures recently that beat expert estimates. Experts estimated an earnings per share (EPS) of $10.54 but the stock revealed quarterly earnings of $13.06 per share. With this development, GOOGL has gone above consensus EPS three times in the last four quarters.

In addition, its trailing twelve months price-to-earnings ratio is 39.59. While the stock may look overvalued, it is actually not far from its five-year average of 34.42. If you also consider that GOOGL has a five-year maximum P/E ratio of 66.23, then it is safe to say that the stock has some upside potential in the short-term.

The strategy is to buy on dips as close to $995 as possible. As long as the stock is above this level, it has the momentum to bounce to our targets of $1,112. Take that out and there’s a possibility of revisiting resistance of $1,254.

The timeline for the target is less than six months.

Weekly GOOGL Chart

Monthly GOOGL Chart

As of this writing, the Alphabet Incorporated stock (GOOGL) is trading at $1,055.94.

Summary of Strategy

Buy: On dips as close to $995 support as possible.

Target:  $1,112 and then $1,254.

Stop: Close below $976.

 

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.8 stars on average, based on 288 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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