Alphabet Inc. is Google's Parent Company. Image source: Jürgen Plasser, flickr.com
The U.S. earnings season continues in full swing following the release of the earnings data for the fourth quarter of Google's parent company. Big Tech thus continues to consistently beat Wall Street's forecasts, which is likely to have a positive impact on the sector. To read more about that, check out our last analysis of the Nasdaq Composite.
Following the market close yesterday, Alphabet Inc. posted its better-than-expected earnings data for Q4, which drove the company's share price higher in after-hours trading. The price action now looks poised for a complete bullish rebound.
Alphabet 2H Price Chart. Image source: Trendsharks ©, created with TradingView.com
This trend reversal is confirmed by the fact that a major 1-5 impulse wave pattern, as postulated by the Elliott Wave theory, was concluded at the lower limit of the descending channel. The subsequent upswing was able to first break out above the 23.6 per cent Fibonacci at 2616.75 and then the 38.2 per cent Fibonacci at 2693.62.
At present, the share price is about to test the 100-day MA (in blue). If it also manages to penetrate above it, it would then head towards the 61.8 per cent Fibonacci at 2817.87. This last Fibonacci obstacle is currently converging with the 200-day MA (in orange) and the upper limit of the channel, making it an even stronger resistance.
It is possible for an intermittent dropdown to the 38.2 per cent Fibonacci to take place first. The 50-day MA (in green) is threading just below it, which means that the share price would very probably rebound from 2693.662 if such a correction does indeed take place.
Alphabet's Robust Earnings Performance in Numbers
Alphabet QoQ Earnings Per Share. Image source: TradingEconomics.com
Alphabet posted earnings per share (EPS) of $30.69 for the three months leading to December, an all-time record, beating the consensus forecasts of$27.34. Its revenue was reported at $75.33 billion vs $72.17 billion expected. Alphabet's solid performance in all aspects mirrored that of Microsoft from last week, thus carrying on the trend of very strong quarterly performance.
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