ServiceNow (NOW) technical analysis – ServiceNow (NYSE:NOW)

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By Ronald Tech

Trading in shares of ServiceNow, Inc. NOW is quiet on Friday. This comes after Thursday’s rally of more than 15%. The company reported earnings of $4.04 per share, which was ahead of consensus estimates of $3.83.

If the stock keeps moving ahead, there is a good chance it can stall out around the $1,000 level. This is why our team of technical analysts has made it our Stock of the Day.

You can see on the chart that this level was support in November, January and February.

Round levels, such as $1,000, are called psychological levels by traders. From a fundamental point of view, meaning considering earnings, there is no valid reason why the $1,000 level is important. But people like to place orders at nice round levels and that gives them importance.

Now that the price of the stock is lower, many of the people who bought shares regret doing so. Some of them have vowed to exit their positions if and when they can eventually do so at breakeven.

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As a result of this, if the stock rallies back up to around $1,000, these remorseful buyers will place sell orders. If there is a significant number of these sell orders, it will form resistance at the price that had been support.

This could put a top on the move higher.

Support turning into resistance is a common occurrence in markets. This dynamic can be seen on the chart with the $868 level. It was support in October, and then it became a resistance level in March.

See also  In the Realm of Billionaire Favorites: Unveiling the Top Stocks They Embrace New Heights for Alphabet Inc.

When billionaires make investment decisions, the world takes notice. It's more than money; it's a statement. They choose to lead, not follow, armed with knowledge few possess. Keeping an eye on their investments is a crafty move for everyday investors.

Alphabet Inc. (GOOGL), Amazon.com, Inc. (AMZN), and Microsoft Corporation (MSFT) are among Wall Street's beloved stocks, hitting record highs recently. These tech giants boast rich histories and a penchant for innovation, attracting the attention of financial elite. Here's a closer look at why these stocks are adored by the affluent and how retail investors can emulate their strategies.

The Rise of Alphabet

Alphabet Inc. (GOOGL) stands as a tech behemoth, tracing its origins back to 1998 in Mountain View, California. Known as Google's parent company, Alphabet shines with a market cap of $2.3 trillion, driven by iconic products like Google Search, YouTube, and Android. With a focus on artificial intelligence (AI) since 2016, Alphabet leads the way in AI innovations with Google AI and DeepMind, shaping the digital landscape we inhabit today.

Recently, Alphabet hit a new high of $191.75, marking a series of peak performances. Over the past 52 weeks, GOOGL stock surged by 48.7%, eclipsing the S&P 500 Index's 25% returns during the same period.

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Moreover, Alphabet declared its first quarterly dividend of $0.20 per share. This move, coupled with a forward yield of 0.42% at current levels, hints at Alphabet's investor-friendly stance.

Trading at 24.39 times forward earnings, GOOGL stock sits below its five-year average of 25.69x. The company's recent Q1 earnings exceeded expectations, with revenue climbing by 15.4% annually to $80.5 billion and EPS rising by 61.5% year over year to $1.89.

Analysts anticipate the unveiling of Alphabet's Q2 earnings after the market closes on Tuesday, July 23, with an expected surge of 27.8% in EPS year over year. Looking into the future, fiscal 2024 EPS is projected to rise by 31.2% annually to $7.61, followed by a 13.1% increase to $8.61 in fiscal 2025.

Billionaires Bullish on Alphabet

In the realm of high-stakes investments, billionaire Daniel Sundheim, heralded as the "LeBron James of investing," increased his stake in Alphabet by over 20% in fiscal Q1. His hedge fund, D1 Capital Partners, upped its holdings to 2.37 million shares, solidifying GOOGL as the fifth-largest position in D1's portfolio at 5.5%.

Meanwhile, the legendary investor George Soros, known for his unique investment approach rooted in chaos theory and reflexivity, bolstered his Alphabet holdings by acquiring 271,549 shares in Q1. This move raised his total shares to 1.5 million, accentuating Alphabet's weight in his portfolio at 3.7%.

Pershing Square’s Bill Ackman also placed his bet on GOOGL, owning 9.4 million Class C shares and 4.4 million Class A shares. Alphabet's dominance in internet search, expansion into high-growth sectors like Google Cloud, robust revenue growth, and strategic dividends make it a darling among top hedge fund managers.

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With an overall "Strong Buy" rating, GOOGL has analysts' favor, with 34 recommending "Strong Buy," three suggesting "Moderate Buy," and seven opting for "Hold." The average price target for Alphabet is $198.34, indicating a potential 6.3% upside, while the Street-high target of $225 implies a 20.6% potential gain.

The Ascendancy of Amazon

At Washington-based Amazon.com, Inc. (AMZN), boasting a $2 trillion market cap, the story is one of e-commerce and tech dominance. Founded in 1994, Amazon's reach extends to entertainment with Prime Video, Amazon Music, Prime Gaming, and Twitch, showcasing its multifaceted prowess. Additionally, Amazon Web Services (AWS) holds sway in enterprise cloud software and AI, underpinning Amazon's clout across various sectors.

Amazon's stock is on a relentless upswing, climbing by 43% over the past 52 weeks, with a 26.8% rise year to date, outperforming the broader market. Notably, Amazon hit a new all-time high last week at $201.20.

www.barchart.com

Priced at 41.35 times forward earnings, Amazon's stock trades at a discount to its five-year average of 182.49x.

Technology Titans' Financial FortunesTechnology Titans' Financial Fortunes: Amazon and Microsoft Hit Stride

Sometimes, if a stock is trending higher, a trader may have trouble deciding where to sell it. Savvy traders let the market tell them where to place their orders.

If the price gets close to a level that was support in the past, there is a good chance it finds resistance at it. This would be a logical place to consider selling.

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