Unlocking Value: Is a Google Comeback on the Horizon?

Welcome to the Extreme Investor Network, your go-to resource for all things investing! Today, we want to dive into a trending topic: the recent behavior of Google’s parent company, Alphabet (GOOG), and explore potential trading strategies that could capitalize on its current market movements.

Market Context: A Unique Moment for Google

Despite surpassing earnings estimates in late October, Alphabet has been under pressure, as evidenced by its lackluster performance over the past month. The broader tech-focused Nasdaq has also faced challenges, diverging from a more bullish market landscape. However, abating bearish trends could be on the horizon.

Recently, the Invesco QQQ Trust (QQQ)—a key ETF that tracks the Nasdaq—hit a new all-time high. This milestone indicates that the tech sector may be gearing up for a year-end rally. But what does that mean for Alphabet and private investors?

Signs of a Turnaround: What to Watch For

A closer look at GOOG’s six-month daily chart reveals encouraging indicators pointing to a potential reversal. Here are some key technical analysis insights that every investor should consider:

1. Strong Support Levels

An essential principle in technical analysis is identifying support and resistance levels. For GOOG, strong long-term support lies around the $165 mark. This area has consistently attracted buying interest each time the stock dips below it, creating a psychological safety net for investors.

2. Higher Highs and Higher Lows

The formation of higher highs and higher lows over the past few weeks reinforces the notion that this bullish structure is robust. Continuation of this trend could lead to sustained upward momentum for GOOG.

3. Relative Strength Index (RSI)

Another critical tool in our analytical arsenal is the Relative Strength Index (RSI). This momentum indicator is showing a reversal pattern, implying that downward momentum is waning. As the RSI begins to rise, it aligns with broader bullish trends, suggesting that GOOG could soon be on the upswing.

The Trade: Structuring Your Entry

For those looking to take a bullish position on GOOG, we recommend considering a "bull call spread" strategy. This approach mitigates risk while providing a clear pathway to profit. Here’s how to set it up:

• Buy a $170 Call with Dec 27th Expiry
• Sell a $175 Call with Dec 27th Expiry

Cost of this combined strategy: $250

Should GOOG rally to $175 by the expiration date, investors can see an impressive 100% return on risked capital, turning an investment of $2,500 into a potential profit of $2,500 from 10 contracts. That’s a remarkable opportunity!

Final Words from Extreme Investor Network

As we approach the end of the year, the dynamics surrounding Alphabet present a unique opportunity for investors willing to position themselves strategically. Keep an eye on essential indicators like support levels, price formations, and momentum indicators like the RSI.

Remember, investing requires careful planning and analysis; your decisions should align with your individual circumstances. As always, consider consulting a financial advisor to navigate these waters effectively.

Thank you for joining us on the Extreme Investor Network! Stay smart, stay informed, and happy trading!

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial, investment, tax, or legal advice. Always consult with a qualified professional before making any investment decisions.