GOOGL Just Hit a Record Ahead of Earnings. What Its Chart Says Here.

Google parent $Alphabet-A (GOOGL.US)$ just hit an all-time intraday high ahead of earnings and has beaten the $S&P 500 Index (.SPX.US)$ in pretty much every timeframe from one month to five years. What do its chart and fundamentals say heading into Wednesday's earnings report?

Let's take a look:

Alphabet's Fundamental Analysis

GOOGL briefly hit a $349 intraday record peak on Tuesday morning as the search-and-cloud giant prepares to publish Q4 results after bell on Wednesday.

The Street was looking at last check for Alphabet to report $2.64 in GAAP earnings per share on close to $111.5 billion of revenue.

That would represent a 22.8% year-over-year gain from Q4 2024's $2.15 in GAAP EPS, as well as a 15.5% y/y gain from the year-ago period's roughly $96.5 billion in revenue.

In fact, 34 of the 47 sell-side analysts on my radar that cover GOOGL have raised their earnings estimates for the quarter since the period began, while five have cut their numbers and eight have made no changes.

Alphabet's Technical Analysis

Next, let's look at GOOGL's chart going back some four months and running through Wednesday afternoon (Jan. 28):

Readers will see the above chart dominated by a rising wedge of bearish reversal that appears close to closing.

Running just below this wedge is the stock's 50-day Simple Moving Average, or "SMA," marked with a blue line.

This means that losing the rising wedge's lower trendline could accelerate into a real breakdown if Alphabet doesn't quickly find support at the 50-day SMA line.

Meanwhile, Alphabet's Relative Strength Index (or "RSI," denoted by a gray line at the chart's top) is quite robust, although not in a technically overbought state.

That said, the stock's daily Moving Average Convergence Divergence indicator (or "MACD," marked with black and gold lines and blue bars at the chart's bottom) is in a far more precarious position.

In fact, the MACD appears to be setting up for some volatility in the near term, as it's giving us mixed messages.

The histogram of the stock's 9-day Exponential Moving Average (or "EMA," denoted by blue bars) is running very close to the zero-bound, which is neither bullish nor bearish.

However, both the 12-day EMA (the black line) and 26-day EMA (the gold line) are running well into positive territory. That's bullish.

Conversely, the 12-day EMA is flirting with the possibility of crossing below the 26-day EMA. That would be a medium-term bearish signal if it happens.

An Options Option

Options traders who are looking to make reduced-risk bearish trades coming out of earnings could likely employ a simple bear-put spread in this scenario.

That's where a trader goes long one put and short another with a lower strike price, but where both puts have the same expiration date. Here's an example:

-- Long one GOOGL put with a Feb. 6 expiration (i.e., after this week's earnings) and a $335 strike price. This cost about $6.15 at recent prices.

-- Short one GOOGL Feb. 6 out with a $315 strike price. This brought in roughly $1.40 at recent pricing.

Net Debit: $4.75.

This trader would be risking the $4.75 net debit to try to bring in $20, for a $15.25 maximum theoretical net profit. This would happen if GOOGL traded below $315 at expiration.

Conversely, this trade's maximum theoretical loss would be the $4.75 net debit. A trader would lose that if GOOGL traded at or above $335 at expiration.

(Moomoo Technologies Inc. Markets Commentator Stephen "Sarge" Guilfoyle had no position in GOOG or GOOGL at the time of writing this column.)

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