Technical analysis

Two stocks to watch: week 4, 2024

By Antreas Themistokleous

23 January 2024

week 4 technical

As week 4 gets underway, two stocks stand out with brimming potential. Here’s a technical breakdown of GOOGL and AMD.

Alphabet Inc. (GOOGL)

Shares of Alphabet Inc. rose by around 4% in the last quarter of the year. The company’s earnings report for the fiscal quarter ending December 2023 is expected to be released on 30 January, after market close. The consensus EPS forecast is $1.60, compared to $1.05 (USD) in the same quarter last year.

The company is involved in the AI frenzy with the introduction of Google Bard and Gemini as tools to compete with OpenAI’s popular ChatGPT. Notably, on the date of Gemini's launch (6th December), the share price experienced a bullish gap of around 6%. Beyond launching these new products, the tech giant also boasts a solid financial position. The total assets exceed total liabilities with an impressive ratio of 3:1, and the current ratio is a remarkable 204%, indicating a strong balance sheet to navigate any short-term challenges.

From a technical analysis perspective, the price has shown relatively steady bullish momentum throughout the majority of the quarter, making consistent early gains in 2024. Currently, the price is trading above the moving averages and is approaching its all-time high of around $150, achieved in November 2021.

The 50-day moving average recently crossed above the 100-day moving average, validating the bullish trend. However, the Stochastic Oscillator is in the extreme overbought territory, suggesting a potential short-term correction before resuming the overall bullish rally.

Advanced Micro Devices, Inc (AMD)

Shares of Advanced Micro Devices, Inc. rose by around 10% in the third quarter of the year. The company’s earnings report for the fiscal quarter ending December 2023 is expected to be released on Tuesday, 30th of January, after market close. The consensus EPS forecast is $0.58, compared to $0.54 in the same quarter last year.

AMD reached a new all-time high on January 19th at $174.23, trading outside the upper band of the Bollinger Bands and indicating market volatility for its shares. As of 30 September 2023, there has been a notable year-over-year reduction of approximately 30.45% in the company's long-term debt, accounting for a modest 13.5% of overall liabilities.

From a technical analysis perspective, the price has reached a new all-time high and corrected downwards in today’s session at the time of this report. The upper band of the Bollinger Bands has acted as resistance while signaling increased volatility for the share.

The faster-moving average (50 days) is trading well above the slower (100 days), validating the overall bullish momentum. The Stochastic oscillator is indicating extreme overbought levels, hinting that a downward correction is likely in the upcoming sessions. If a correction occurs, the first area of potential support might be around the $160 level, which is a psychological round number and also just below the 23.6% Fibonacci retracement level on the weekly chart.


This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Author:

Antreas Themistokleous
Antreas Themistokleous

Antreas Themistokleous is a trading specialist in Exness. He is a Certified Financial Technician since 2018. As a member of the Society of Technical Analysts, Antreas is implementing advanced use of indicators and patterns to conclude in an action plan for different trading strategies.