Shares of Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) finally found some solid support at the $1,000 level after a bruising selloff during the past two months. GOOGL stock had dropped over 200 points, or nearly 20%, after closing above $1,200 on Oct. 1.

While the buying was admittedly overdone to the upside at the previous highs, in a similar fashion, the selling has now become overdone to the downside. Look for GOOGL stock to be a solid performer in the coming months, especially given the compelling valuations and improving technical backdrop.

GOOGL stock is looking decidedly more attractive from a valuation standpoint. The company has absolutely crushed earnings over the past three quarters, yet the stock has gone virtually nowhere in that same time frame.

Increasing earnings and a stagnant share price makes for a much lower price-to-earnings ratio, as the chart shows. GOOGL is now approaching the lowest P/E multiple since April, which proved to be a very opportune time to buy Alphabet stock

Price to sales (P/S) paints an even more compelling picture. GOOGL stock is now at the cheapest P/S ratio by far in the past year. Ultimately, valuations do matter-and investing at lower valuations lead to higher returns in the long run.

GOOGL is also looking attractive from a technical perspective. After breaking out past $1,000 a year ago, Alphabet stock has retested that level on numerous occasions and held each time. Money flow is improving after breaching the 30 area, which has marked significant lows in the past. Shares have also broken the downtrend line … yet another bullish sign.

Most importantly, at least on a technical basis, GOOGL stock had a key reversal day Nov. 20. After opening lower and making new recent lows at $1,002.21, Alphabet ripped higher to close up on the day at $1,030.45. This type of price action, especially after such a sharp sell off and at a major support area, is usually an indication that the sellers have finally become exhausted and that the buyers are now in control.

Given that GOOGL stock has dropped nearly 20% from the recent highs, even with better earnings and held critical support at $1,000, investors and traders should look to add Alphabet to their portfolio on any weakness.

A meaningful break of $1,000 would be my stop out level.

Tim Biggam may hold some of the aforementioned securities in one or more of his newsletters. Anyone interested in finding out more about Tim and his strategies can go to https://marketfy.com/item/options-and-volatility.