Can Google Resume Its Uptrend?

| + More Articles
  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

With shares of Google (NASDAQ:GOOG) trading around $1,202, is GOOG an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

Google is a global technology company focused on improving the ways people engage with information. The business is based on the following areas: search, advertising, operating systems and platforms, and enterprise. The company generates revenue primarily by delivering online advertising. Google is a search giant with most of the market share, largely because of its execution and delivery. An increasing number of consumers and companies worldwide are coming online, which will surely increase the amount of eyes on the company’s ads and, in turn, advertising revenue. At this rate, look for Google to remain on top of the Internet world.

If Google’s latest acquisition is anything to go by, entering a password on a website could soon be as easy as placing your smartphone near your computer. Israeli startup SlickLogin confirmed on Monday it has become the latest company join the Mountain View, California, ranks (although it will work from Google’s local offices), bringing its patented sound-based smartphone technology with it. While neither party has disclosed much information, Google’s intentions seem clear: The company already offers its two-factor authentication tech free to everybody, but it can be a pain to enter a six-digit authentication code (which changes every minute).

SlickLogin’s system, however, requires no additional technology — just place your phone near your computer and inaudible sounds played through the speakers take care of the rest. The Israeli team says Google is already “working on some great ideas that will make the internet safer for everyone,” except maybe from your dog, who could hear all of your future passwords.

T = Technicals on the Stock Chart Are Strong

Google stock has been exploding to the upside in the past several years. The stock is currently trading near all-time highs and looks set to continue this path. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Google is trading above its rising key averages, which signals neutral to bullish price action in the near-term.

GOOG

Source: Thinkorswim

Taking a look at the implied volatility (red) and implied volatility skew levels of Google options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Google options

18.56%

0%

0%

What does this mean? This means that investors or traders are buying a small amount of call and put options contracts as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

March Options

Flat

Average

April Options

Flat

Average

As of Monday, there is average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business