Google Stock Falls On Earnings; Adobe, Trade Desk Hit Buy Zones In Stock Market Rally| Investor’s Business Daily

Dow Jones futures fell modestly late Monday, along with S&P 500 futures and Nasdaq futures, after the Nasdaq composite led gains Monday, extending the current stock market rally. After the close, Google parent Alphabet (GOOGL) earnings topped views, but included some special items. Google stock fell late after closing above an aggressive buy point. Several top stocks broke out or tested entries Monday, including Adobe stock, Trade Desk stock, Tableau stock and Splunk stock.


Google stock, Adobe (ADBE), Trade Desk (TTD), Tableau (DATA) and Splunk all have IBD Composite Ratings of at least 97. Trade Desk stock boasts a best-possible 99 Composite Rating. So does Splunk stock. Trade Desk is on the IBD 50. Adobe stock has joined the IBD Leaderboard watch list. Tableau earnings are due Tuesday night.

Dow Jones Futures Today

Dow Jones futures lost a fraction vs. fair value. S&P 500 futures sank 0.15%. Nasdaq 100 futures retreated 0.3%, with Google stock weighing on tech futures. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Current Stock Market Rally

The Nasdaq composite rose 1.15% Monday, fueled by Apple (AAPL), Microsoft (MSFT) and top techs. The Dow Jones and the S&P 500 index both climbed 0.7%. The current stock market rally cleared a short consolidation last week and is now setting its sights on the indexes’ Dec. 3 peaks. Crucially, a larger number of top stocks have been breaking out of bullish bases, making the current stock market rally actionable for CAN SLIM investors.

Google Earnings Messy

Google parent Alphabet reported fourth-quarter earnings of $12.77 per share. Gross revenue climbed 21.5% to $39.28 billion. Analysts had expected Google earnings to rise 12% to $10.86 per share, with gross revenue up 21% to $38.98 billion.

But Google earnings included a $1.3 billion unrealized gain related to a nonmarketable debt security. Operating income and margins fell short of some metrics.

Alphabet’s board increased its Google stock buyback authorization to $12.5 billion from the previous authorization of $8.6 billion. Some analysts had expected more.

Google Stock Drops

Google stock fell 3.1% to 1,106 in late trading, as analysts and investors digest the complex Google earnings report.

Shares closed up 2% to 1,141.42 in Monday’s stock market trading, clearing their 200-day line and an aggressive buy point of 1,135.10.

But that aggressive entry, which could be interpreted as a double-bottom base, was just above the midpoint of the base from Dec. 3. Generally it’s preferable to see entry points at or near the consolidation highs. That’s especially true after a stock corrects sharply, like Google did in late 2018.

Google’s relative strength line, which tracks a stock’s performance vs. the S&P 500 index, is off consolidation highs, though it is above the level where it was when Google stock had a short-term peak on Dec. 3.

Google stock has a conventional buy point of 1,291.54.

While Apple stock and FANG stocks such as Google have rallied from their lows, they haven’t been leaders in the current stock market rally. That could change over time, but many other top techs are thriving in the stock market rally.

Adobe Stock

Adobe stock rose 3% to 254.74 Monday, clearing a 250.78 handle buy point in a double-bottom base. Volume was below average. Investors should look for stocks that break out in volume that’s at least 40% to 50% above normal as a sign of institutional buying. The RS line is right at record highs

Trade Desk Stock

Trade Desk stock advanced 4.4% to 151.67. Shares of the digital ad platform moved above a double-bottom-base buy point of 149.10 in volume that was 46% above normal.

Tableau Stock

Tableau stock climbed 1.3% to 132.07, just above a 131.92 buy point. Volume was 7% above average. Earnings are due late Tuesday. Investors should be cautious about buying stocks just ahead of earnings.

Splunk Stock

Splunk stock rose 1.2% to 128.83. Shares hit 130.80 intraday, briefly clearing a 130.10 entry from a cup base.

Note that three of these notable stocks are from the software sector: Adobe stock, Tableau stock and Splunk stock. That’s not a surprise. Software has been the top-performing sector in the current stock market rally.


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Originally posted 2019-09-19 23:32:48.


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