Is the Alphabet Inc. share price a buy at current levels?
The Alphabet Inc. share price has gained roughly 40% in 2023 to help lead the Nasdaq and FANG Indices higher.
While Q1 2023 earnings were a sharp beat on consensus estimates, the share price of the company has been further supported by the announcement of a $70 billion share repurchase program. The share buyback announcement has helped instill investor confidence that last year’s selloff in the stock (and technology sector peers) has created a relative value in the current market environment.
A ‘golden cross’ suggests new bull trend for Alphabet Inc.
A daily chart of the Alphabet Inc. (all sessions) highlights that the 50-day simple moving average (50MA) (green line) has recently crossed above the 200-day simple moving average (200MA) (blue line). This moving average crossover is known as the ‘golden cross’, a suggestion that a new bull trend may be emerging.
Inversely, when the 50MA crosses below the 200MA the technical analysis term associated with the occurrence is referred to as the ‘death cross’. A death cross is a suggestion that a new long term bear trend may be emerging.
The chart above marks the ‘death cross’ occurrence on Alphabet in March 2022 with a black arrow and the current (May 2023) and previous (June 2020) ‘golden cross’ scenarios with the green arrows.
It should be noted that the ‘golden cross’ is considered a longer-term indication of trend. Short term traders might use this in determining a bias to trades i.e., looking for opportunities for long entry rather than short entry, while the longer-term trend is considered up (by these metrics).
Alphabet Inc. broker ratings and price targets
A Refinitiv poll of forty-nine analysts / brokers maintain a long-term average rating of buy for Alphabet Inc. (as of the 17th of May 2023), with sixteen of these analysts recommending a strong buy, twenty-nine recommending a buy and four recommending to hold the stock. There are currently no sell or strong sell recommendations on the company in the survey.
A median long term price target from these analysts arrives at a share price of $130.89, roughly 10% higher than the current share price (as of the 17th of May 2023).
IG client sentiment
The majority (88%) of IG clients with open positions on the Alphabet Inc. expect the price to rise in the near term, while 12% of clients with open positions expect the price to fall. The client sentiment indicator represents a snapshot of open positions as of 2pm (GMT) on the 17th of May 2023.
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