Options Corner: GOOGL “Death Cross” Looms Over Earnings

We're back on morning movers. Backthe tech trade alphabet. Google set to report its quarterly results after the closing bell t Wall Street looking for earnings per share of 2.94 on an adjusted basis and nearly $112 billion in revenue for the quarter.hares have been under pressure this month. The stock is still up more than 19% year over year. Time now for options corner. Joining us at Schwab Imp to take a deeper look at this name is Tom white cohost of Fast senior options contributor. Tom good to see you on the ground there in Beantown. Boss has a special place in my heart. You know, I've got some family. But let's talk about the chart first before the trends. First e get into an example trade. Diane, I think if you take a scope of what's going on al, right. It's up 2% so far in 2026. Right. So underperformed a lot of the other major tech companies, especiale of the hyperscalers. Right. We've gotten a little bump so far this But if you l at it over a three year period, I mean, this stock is still up abou 164% over that time frame. You can see here a three year weekly chart. So although we haven't had those gainshat we've seen from other major tech companies recently, it's had a great run over the past three years. So take that into context. Going into earnings, I always like to broaden out the look on a stock because it won't tell that whole story. If you just loot on a year, year to date basis or a one year chart at this point. So with that being said, now you have the scope. Let's tighten it up a little and look at a different chart. That's a shorter time, shorter time e, riy chart here in Google Alphabet. And I've got a couple key areas kind of focus on with this chart Ioned, it's only up about 2.6% so far this year. It's off 21% from its all time highs, which were all the way back in May. Right.e have five months ago when the stock hit its all time highs. So it'su see a couple key levels here 50 day and 200 day simple moving averages that yo canof focus on. Those are converging. So seen that 50 day simple moving average move lower as a stocks underperformed. While that 200 day moving average below in blue is starting to flatten out here a little bit. So we've that convergence. Maybe there is this risk for a big outsized move going into earnings. That's one of the things you have to take a l at. And on the bottom of this chart Diane you're going to see RSI while it's tipped up ticked up the last couple of days. It's still at level of about 39. So anything below 30 consi oversold on a technical basis. Well we're starting to see a little bit of momentum to the upside, but still far below the 50 midpoint levelis one. A couple areas that you have to look at with the volume p on far right in blue point of context is right here. If the 50 day simple moving average moves below that day moving average, we get that death cross coming into play. That's the area of con that traders are going to have to look at. About87 are the levels that I'm looking at to the upside. On the downside, we've got a good base here that's come in. Remember we vi this area around 32325 all the way back July. Does that hold once again? Goi into earnings. So watch this area probably of a lf about 320 where we might see some support in this one And then to the upside not too many big you know headwinds theto 3.58. Might be an area that might create some resistance. Along with that point of context that I mentioned around 340 to 342. What's the approach for an example t So I looked at this maybe a little bit more aggressive because of the fact that it's underperformed here a little bit a taking advantage of maybe a little bit duration. This isn't a pure ear play. You know we're going to get earnings tonight after the close. In't use the October 30th weekly or weekly cycle. I went out to the November monthly cSo I'm giving myself three and a half weeks here. If you think the stock's going to rebound maybe play catch up with some of the o hyperscalers in this space in the Nov 20th, monthly options that expire in 23 days. We're 325 strike call and then against it to off some of theskl purchase. We're going to sell the 350 strike call. So a bullish $25 wide call vertical. You're going to roughly about $8 debit for this call vertical. That's going to be your risk $800 per spread. And it takes your break even. You can see here from the risk e up to 333 over the next three and a half wThat's only 2.5% above the current share price in Google Alp If i opens up about 324. Now the optionarket pricing in for that option series in November where you're buying this vertical plus or -$32 move. Well what signs up lines up with the $32 expected move about. So risking 800 to make a potential 1700. Pretty good risk reward se if you're bullish on this one post Tom. Appreciate thatthank you