Bullish – GOOGL $1,264.30 – Internet and Advertising
The S&P 500 (SPY) last week briefly topped its $302 resistance before falling back and closing at $301.60. The busiest week of the third quarter earnings reporting season is next week and the Federal Reserve Board’s interest rates actions Wednesday will help determine whether SPY will break out to new record highs.
GOOGL Trade Idea:
On CNBC’s weekly OptionsAction show Friday, Carter Worth predicted that if Alphabet (GOOGL) lives up to expectations with a bullish earnings report Monday, it will break out of its long slump and help lead the markets higher. Michael Khouw proposed a vertical call trade with a January expiration to give the trade time to work. The trade allows options traders to speculate on GOOGL for less than $3,000 instead of risking nearly $130,000 for 100 shares. Resistance is at $1,296.97 and support is at $1,200. GOOGL’s Technical Score is a neutral 6.
As a stop loss, if GOOGL was to trade below $1,220 for multiple days, this would invalidate our analysis and we would suggest cutting losses on the trade.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: GOOGL OptionsAction Trade
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