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Capture Up to 250% in Alphabet Inc (GOOGL) Stock

It’s hammer time in GOOGL stock using a creative options spread

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The trend these days is looking a bit friendlier in shares of Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL). But if you’re looking for GOOGL stock to rally while protecting your own bottom line through earnings, purchasing a low-cost, modified- and limited-risk spread is an attractive alternative. Let me explain.

Capture Up to 250% in Alphabet Inc (GOOGL) Stock
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A month ago, the situation in GOOGL stock, off and on the price chart, warranted a more cautious stance on the part of bullish investors in our estimation.

Conditions in GOOGL weren’t dire, but a recent Goldman Sachs downgrade and souring tech stock sentiment (following an overbought rally) had this strategist looking at a more defensive spread idea, before turning bullish, using an unorthodox put butterfly credit spread.

Shares in fact did manage to move lower by a couple percent, netting the correction’s total decline at just over 9%. It’s a healthy pullback to be sure, especially for a mega large-capitalization stock sporting a market Beta of 0.92. That point is made all the more compelling if one compares the S&P 500’s sub 2% and Nasdaq’s 5.5% corrections from their respective June highs. But is a lasting bottom in place in GOOGL stock?

Personally, nobody except perhaps Goldman Sachs knows when a bottom may have been put in in advance of a turnaround. Nevertheless, I do see sufficient evidence on GOOGL stock’s price chart worthy of considering a bullish options strategy focused on capturing some anticipated upside without breaking the bank.

GOOGL Stock Weekly Chart


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As alluded too above, in my last discussion of GOOGL stock, the technical observation was that shares were unlikely to have found a low. It turns out our cautious stance was well-served.

At the time, a lightening fast reversal from all-time highs unwound an overbought weekly Bollinger band condition. However, that bit of good news was countered by a still prone stochastic position and Alphabet’s price spread relative to the 40-week, or 200-day, simple moving average.

Currently, and following a few more weeks of consolidating and a more meaningful corrective low, conditions are looking better for Alphabet shares.

Bottom line, with GOOGL now flirting with an oversold stochastics condition with a bullish weekly chart hammer confirming a successful test of the upper channel line for support. Net, net it’s time to be look for some upside capture in the coming weeks using a lower and limited-risk spread on Alphabet.

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Article printed from InvestorPlace Media, http://investorplace.com/2017/07/capture-up-to-250-in-alphabet-inc-googl-stock/.

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