Alphabet Inc (GOOG:NASDAQ)
Price at Preparation: $149.54 (September 9th, 2024)
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What they do
Alphabet Inc. is a holding company. The Company is partitioned into these areas:
- Google Services: includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube.
- Google Cloud: includes infrastructure and platform services, collaboration tools, and enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as cybersecurity, databases, analytics, and artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Duet AI for Google Cloud. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, Meet.
- Other Bets: is engaged in healthcare-related, Internet and self-driving services consisting of businesses such as Access, Calico, CapitalG, GV, Verily and Waymo.
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Opinion
In July Alphabet Inc (GOOG:NASDAQ) hit a high of $193.31 after paying out a dividend for the first time in June and capitalizing on the AI trade along with the likes of Nvidia (NVDA), Microsoft (MSFT) and Amazon (AMZN). Since that high, the tech sector as-a-whole has pulled back, putting a few high-flying stocks back in good spot to add for the long term. Alphabet has dropped approximately 30% to date and close to what we would consider a buy range as this was previously good support. This would serve as a good support to regain traction to the upside. Especially with all the technology they have created and at their disposal from their dominant Google Ads to their secondary big bets of Google Cloud Platform, YouTube and Waymo. This should be a stock to own in any portfolio and to add to on weakness.
Even though the stock has pulled back from the high earlier in the year, analysts have a street consensus of 50 Buys, 13 Holds, 0 Sells and the 12-month Price Targets (PT) as follows:
- Low: $170.00 USD (+13.68%)
- Average: $204.15 USD (+36.52%)
- High: $225.00 USD (+50.46%)
Plan
As usual, find the visual aid below with following colors:
- Blue: 52-week high.
- Red: 52-week low.
- Green: 12 Month PTs (high / avg / low).
- Orange: Support/resistance lines
- Yellow: Our plan and targets.
In the accompanying visual aid for Alphabet Inc (GOOG:NASDAQ), note in yellow the range discussed above which would serve as the support to either start or add to an existing position. It is impossible to catch the bottom, so a prudent method is to Dollar Cost Average (DCA) into the position using the orange support lines and breaking the total of the spend into 3 – 4 sections based on your personal risk tolerance profile which we discuss every week. We could pick up shares at $144.56, $131.78 and $121.46 (all USD), with the lowest buy point being the 52-week low price and a little under the yellow support range.
Once a bottom has been found, there is a possibility a repeat of a sideways move before a breakout to the upside. Keep in mind Alphabet’s 12 -month price target (PT) listed above of low-$170.00 USD (+13%), average-$204.15 USD (+36%), high-$225.00 USD (+50%) and aim for at least the low-PT to secure profit. Stop-losses should be set and used to mitigate risk on the position as it moves as per your risk tolerance. Use the orange support/resistance lines to update these as the price moves through the lines.
This trade is targeting getting back to the previous 52-week high and to the 12-month average PT. This trade will take time to get there. Post that, any moves higher should only be using profits, which will be a risk-free trade that that point.
This is one method to make this trade. We can discuss potential other methods to attack this stock live IF you sign up to attend our weekly Theta Bandits Webinar – When we trade together, we learn together!
RISKS
The goal is to grow capital by securing profits along the way and limiting losses. Make sure to plan to trade within your risk tolerance, allowing time for success while updating limits and exit points to mitigate risk.
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Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
