4 Trade Ideas for Alphabet: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Alphabet, $GOOGL, made a high in February and then pulled back to the 20 day SMA. The next day it gapped down and continued to fall over the following month, to a low in mid-March. At the bottom it had lost over 30% of its value. It consolidated there for 3 weeks before starting a reversal move higher in April. By mid-May it was approaching the gap but lost steam and pulled back to the 20 day SMA. It bounced there and is now back at the May top. This is also a 78.6% retracement of the drop.

The RSI is rising in the bullish zone with the MACD trying to move higher out of a flat period and positive. The Bollinger Bands® are pointing higher. There is resistance at 1420 and 1440 then 1478 followed by 1490 and 1531. Support lower comes at 1398 and 1385 then 1365 and 1330 before 1300. Short interest is low under 1%. The stock does not pay a dividend. The company is expected to report earnings next on July 23rd.

The June options chain shows the biggest open interest at the 1375 put strike and then 1300. On the call side it is also biggest at 1375 with some size at 1400 and 1500. The July options have much less open interest but it is found at 1310 on the put side and 1410 and 1510 on the call side. The August options are the first to cover the earnings report and are also light on open interest. The biggest is at the 1385 call.

Alphabet, Ticker: $GOOGL

Trade Idea 1: Buy the stock on a move over 1420 with a stop at 1390.

Trade Idea 2: Buy the stock on a move over 1420 and add a June 1410/1375 Put Spread ($16) while selling the July 1520 Calls ($16).

Trade Idea 3: Buy the June/August 1450 Call Calendar ($47) and sell the August 1300 Put ($42).

Trade Idea 4: Buy the August 1300/1420/1500 Call Spread Risk Reversal for a $1 credit.

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the Memorial Day Weekend and unofficial start of summer, sees equity markets posted a strong week with signs of potential range breaks to come.

Elsewhere look for Gold to continue to consolidate while Crude Oil moves to the upside. The US Dollar Index continues to churn sideways while US Treasuries consolidate as well. The Shanghai Composite looks to be reversing lower while Emerging Markets consolidate under resistance.

The Volatility Index looks to remain elevated and drifting lower easing the roadblocks in front of equity markets. Their charts are looking a bit stronger on the shorter timeframe and possibly on the edge of breaking consolidation to the upside. The one exception to this is the QQQ which is in a full blown uptrend. On the longer timeframe all 3 Index ETF’s look strong. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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