Alphabet Inc (GOOGL) Latest Product Reveal Fails to Impress

Alphabet Inc (NASDAQ:GOOGL) is staring up at a newfound layer of technical resistance

by Kirra Fedyszyn

Published on May 18, 2016 at 3:16 PM

At today's kickoff for the Google I/O annual developers conference, Alphabet Inc (NASDAQ:GOOGL) unveiled a voice-activated home device -- much like Amazon.com, Inc.'s (NASDAQ:AMZN) Echo. The "Google Home" is expected to arrive on the market this fall. The company also announced a new messaging app to go head-to-head with Facebook Inc's (NASDAQ:FB) Messenger -- called "Allo," and a smartphone Assistant, similar to Apple Inc.'s (NASDAQ:AAPL) Siri. However, GOOGL stock is 0.1% lower this afternoon at $717.90, and is staring up at a level of potential resistance.

In fact, although GOOGL has added 31% year-over-year -- and tapped a record high at $810.35 in early February -- a post-earnings slide in late April eventually sent the shares tumbling beneath their 160-day moving average. Recent attempts to reclaim a trendline that helped buoy GOOGL for most of the past year have come up suggesting the trendline is now taking on a more resistant role.

GOOGL Daily Chart May 18

On the sentiment front, options volume on GOOGL has been relatively light lately, but traders have been unusually pessimistic. The stock's 50-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 0.77 -- higher than 83% of all readings in the past year.

It's possible, too, that the lower-than-usual options volume may be the heftier price of entry for near-term traders. Specifically, GOOGL's Schaeffer's Volatility Index (SVI) of 796% ranks in the 72nd percentile of its annual range, indicating premium on the equity's short-term options is pricing in relatively high volatility expectations at the moment.

Outside of the options pits, however, optimism still rules. Short interest on the stock continues to fall, dropping nearly 10% over the last two reporting periods, and now represents less than 1% of Alphabet Inc's (NASDAQ:GOOGL) available float. Plus, 94% of analysts rate the stock a "buy" or better, without a "sell" rating in sight.

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