How To Trade Alphabet (GOOGL) Stock Before And After Q3 Earnings

Alphabet, Inc GOOG GOOGL will print its third-quarter earnings after the bell on Tuesday. The stock was rising over 1% heading into the event, for a total increase of 6% over the last three trading days.

The stock started to trade on a 20-1 split adjusted basis in the middle of the quarter, on July 18.

In the trading session following Google’s second-quarter earnings miss, the stock gapped up over 3.9% and rallied and additional 3.65% intraday. For that quarter, Alphabet reported EPS of $1.21, missing the $1.31 estimate, and revenues of $69.7 billion, which missed the $70.35-billion estimate.

For the third quarter, the consensus estimate for Google’s earnings per share comes in at $1.26 on revenues of $70.94 billion.

KeyBanc Capital Markets’ analyst Justin Patterson cut the price target for Alphabet on Tuesday from $125 to $120... Read More

Traders will be watching closely to see how Alphabet reacts in the aftermarket trading session. Holding a position in a stock over earnings, especially for options traders who must consider "premium burn," is risky because a stock can drop following an earnings beat and rise following a loss.

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The Alphabet (GOOG) Chart: Alphabet reversed course into an uptrend on Oct. 13 after printing a new 52-week low at $95.27. The stock’s most recent higher low was formed on Oct. 21 at $98.23 and the most recent confirmed higher high was printed at the $104.22 two days prior.

• On Tuesday, Alphabet gapped up slightly to start the trading session and attempted to rally intraday. The stock was heading toward the 50-day simple moving average (SMA), and if Alphabet can regain the level as support it will indicate longer-term sentiment has turned bullish.
• The rise higher was taking place on lower-than-average volume, which may cause some bullish traders to be concerned. Bulls want to see stocks move higher on higher-than-average volume to indicate a high degree of interest in the stock.
• Bearish traders want to see Alphabet suffer a bearish reaction to its earnings print that will cause the stock to print a double top pattern at Tuesday’s high-of-day. If Alphabet falls below the $98 level, the uptrend will be negated.
• Alphabet has resistance above at $106.53 and $111.50 and support below at $101.08 and $97.79.

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