ALPHABET INC. (GOOG) - The Search Oracle

How to Play Alphabet’s AI-Fueled Rebound with Defined Risk & Reward

Alphabet GOOG 0.00%↑ sits at the forefront of digital advertising, cloud computing, and AI innovation. With strong cash flows and an aggressive AI push, it’s one of the tech sector’s pillars, but recent volatility has created a clear, risk-defined swing setup.

In a Nutshell

• Buy zone: $166–$167 on dips (50-day SMA support)

• Stop: $162 (below key fib & swing low)

• Targets: $183 (daily 61.8% retrace), then $194–195 (weekly 78.6%)

• Timeframe: 1–4 week swing; add on daily close >$173.60

Fundamental Highlights

• Ad revenue growth: Mid-teens thanks to AI-driven products & YouTube monetization

• Cloud & AI capex: Investing heavily to catch up with AWS/Azure, fueling long-term growth

• Margins & cash flow: >25% operating margins, $40B+ free cash flow annually

• Valuation: ~24× forward EPS, rich but justified by rapid AI deployments

• Risks: Regulatory headwinds, cyclical ad spend, cloud competition

Technical Overview

• Daily chart:

  • Holding 50-day SMA (~$166.5) and fib confluence at $163–$166

  • 100-day SMA near $169.7 just reclaimed; 200-day SMA (~$173.6) caps upside

• 2-Hour chart:

  • Bullish SMA ribbon (50 > 100 > 200) with price above all three

  • Bollinger Bands tightening ahead of potential breakout

• Weekly chart:

  • Price back above 50 & 100-week SMAs, neutral to bullish

  • 200-week SMA (~$173.5) remains key hurdle

• Fibonacci levels:

  • 61.8% retrace of May–Jun swing ≈$162–$163 (support)

  • 38.2% retrace of 2024 high–low ≈$171.7 (near current price)

  • 78.6% retrace of 2024 swing ≈$194.5 (secondary target)

Trading Strategy

• Entry:

  • Scale in on dips into $166–$167 (50-day SMA zone)

  • Optional add-on above daily close >$173.60 (200-day SMA)

• Stop-loss: $162 (below fib & May swing low)

• Targets:

  1. $183 : daily 61.8% retrace of the major June sell-off

  2. $194–$195 : weekly 78.6% retrace cluster

  3. Stretch: $213 : 1.618 extension of the 2025 up-leg

• Risk management:

  • Risk ≤1–1.5% of capital on initial stop

  • Trail at daily 100-SMA or BB mid once above $173.60

• Time horizon: 1–4 weeks; adjust stops as price follows the SMA ribbon

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Key Takeaway
Alphabet’s blend of solid fundamentals and a multi-timeframe technical setup offers a well-defined risk/reward. Buying dips into 50-day support with clear stops and targets aligns you with both the long-term trend and short-term momentum.