Alphabet Inc’s Stock on the Rise
Amidst the choppy waters of the stock market, technology giant Alphabet Inc, known for its robust Google division, has been navigating the waves with finesse, riding a more than 5% surge in the past month. The catalyst behind this upward momentum? The burgeoning interest in artificial intelligence.
Driving Forces Behind the Surge
A recent development in Alphabet’s Google AI division has the street abuzz – Sir Demis Hassabis spearheading the creation of an AI model tailored to aid research endeavors. This innovation is designed to foster cross-disciplinary cooperation, enhancing the efficiency of scientific investigations.
In parallel, Alphabet’s autonomous driving arm, Waymo, unveiled its cutting-edge sixth-generation hardware in late August. The rollout aims to slash operational costs while boosting performance, particularly in inclement weather conditions. Noteworthy projections from automotive research firm S&P Global Mobility have set U.S. autonomous vehicle sales soaring to an estimated 230,000 units by 2034.
Implications of Heightened Trading Activity
An intriguing development on the trading front – implied volatility (IV) in the options market for GOOG stock is on the upswing. Around the midpoint of September, the IV rank stood at a modest 28%, but by the latest close on Wednesday, this metric soared astronomically to nearly 75%.
IV serves as a barometer for the market’s anticipation of future price gyrations, signaling the degree of expected price swings, whether upward or downward. Surges in IV translate to escalated option premiums, reflective of escalated demand.
This flurry of trading activity around GOOG stock is likely a prelude to Alphabet’s imminent third-quarter earnings reveal scheduled for October 22. While most recent transactions have leaned towards bullish sentiments, a faction of market “whales” has placed bearish options trades, presenting a contrasting viewpoint.
Enter Direxion’s ETFs
The tussle surrounding one of the tech industry’s behemoths forms a fertile battlefield for financial services provider Direxion. The firm’s leveraged and inverse exchange-traded funds (ETFs), keyed into GOOGL’s fortunes, offer traders swift, directional plays on the tech powerhouse.
The Optimistic Choice: GGLL ETF
For bullish investors, the Direxion Daily GOOGL Bull 2X Shares (GGLL) endeavors to double the daily returns of GOOGL stock – a strategy which has borne fruit this year, yielding over 19% since January. Leading into Alphabet’s Q3 revelations, GGLL has charted a robust spike of almost 23% since the September 10 close, painting an encouraging picture for optimistic traders.
However, to sustain this momentum, GGLL must shatter the resistance barrier perched at $38, a critical level for prospective speculators.
The Pessimistic Alternative: GGLS ETF
On the flip side, for those bearish on the technology landscape, Direxion’s Daily GOOGL Bear 1X Shares (GGLS) hasn’t had a smooth sail this year, hemorrhaging about 19% in value year-to-date.
Presently languishing below both its 50-day and 200-day moving averages, GGLS faces a vital struggle to hold above the support threshold of $14. Despite this tumultuous journey, GGLS has exhibited a tenacious bounce from its yearly low, providing a glimmer of hope for the skeptics.
Featured photo by AS Photograpy on Pixabay.