Alphabet Inc (GOOG)

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GOOGL stock recently flashed a death cross
By: Schaeffer's Investment Research | November 28, 2018

FAANG stocks have been battered during the stock market sell-off, with several flashing death crosses in recent weeks. Alphabet Inc (NASDQ:GOOGL) is one tech name whose 200-day moving average moved above its 50-day moving average. If history is any guide, the equity could be ready to bounce back, considering GOOGL has been one of the best stocks to own in December over the past decade.

More specifically, GOOGL shares have averaged a December gain of 3.55% over the last 10 years, with 90% of those returns positive. Alphabet is the only FAANG stock that made the list, and a move of similar magnitude would put the shares back near $1,100 by the New Year, based on their current perch.

Looking closer at the charts, the tech giant has surrendered roughly 18% since topping out at a record peak of $1,291.44 in July. More recently the shares tested support in the $1,020 neighborhood -- which has served as a floor for the past 12 months, and is near the site of the October 2017 bull gap lows.



The recent downside has certainly spooked options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GOOGL's 10-day put/call volume ratio of 0.95 ranks in the 95th annual percentile, meaning puts have been bought to open relative to calls at a quicker-than-usual clip.

Skepticism has been growing elsewhere on Wall Street, too, with short interest up 6.2% in the two most recent reporting periods to 1.91 million shares. However, these bearish bets still only account for 0.3% of the stock's available float.

Analysts, on the other hand, have remained steadfastly bullish on the security, with 26 of 27 brokerages calling it a "buy" or better. Plus, the average 12-month price target of $1,349.73 a nearly 28% premium to current trading levels.

Today, GOOGL stock is trading up 0.6% at $1,058.59, potentially reacting to a pair of headlines. Specifically, the Washington Post reported Google CEO Sundar Pichai will testify in front of Congress in December. Plus, Google's YouTube plans to make the streaming service's original content available to all users, as opposed to just paid users.

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