Is Alphabet (GOOGL) Setting Up for a Big Move?

Alphabet Inc. (GOOGL) is a holding company, with Google, the Internet media giant, as a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Its other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue…

Alphabet Inc. (GOOGL) reported strong second quarter results due to solid momentum across its search, advertising, cloud and YouTube businesses. The company is benefiting from an increasing number of consumer online activities and rising advertiser spending. Its cloud division continues to be a key growth driver.

The company has a whopping $135.9 billion in cash as of the end of the most recent quarter, which greatly outweighs its long-term debt of $25.9 billion. This has led to a Quality Grade of B in our POWR Ratings system.

Earnings have risen an average of 29% per year over the past five years and were up 102.8% over the past year. Analysts forecast earnings to rise 72.5% in the current year. GOOGL’s stock appears a bit overvalued with a forward P/E of 30.86. The stock has shown bullish momentum since October as shown in the chart below.

Take a look at the 1-year chart of GOOGL below with my added notations…

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