GOOG shares jumped up after the company announced a change in its operating structure, creating a holding company called Alphabet to pool its subsidiaries. This could mean more gains for the company stock, as these smaller business segments are also set to perform well.
Price gapped up by more than $100 before retreating slightly. More details on this holding company should emerge soon and positive investor forecasts could mean more gains for GOOG shares in the near term. However, stochastic and RSI are starting to move lower, suggesting that a bit of profit-taking might be in order, offering traders a chance to hop in at lower prices.
The 100 SMA is above the longer-term 200 SMA, crossing up after the price broke out of consolidation recently. A large pullback could fill the gap until the support at $575/share before the uptrend resumes past the previous highs around $675/share.
GOOG Shares Outlook
The newly created Alphabet holding company will house Google’s main businesses, including its search engine unit, mapping and YouTube. Under this reorganization, Google’s new entities will be run separately, including Google Fiber, Nest, the investment arm Google Ventures, its current efforts in life sciences and its delivery drones venture.
According to the announcement, Google co-founder and chief executive Larry Page will remain at the helm, becoming Alphabet’s CEO. “Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet,” Page wrote in a blog post.
“Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead,” he added. “This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google.”
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