Alphabet Inc (GOOGL) Gets a Barron's Boost

Barron's named Alphabet Inc (GOOGL) one of its "top stock picks" for 2017

Dec 5, 2016 at 2:56 PM
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Like this homebuilder stock, Alphabet Inc (NASDAQ:GOOGL) has been named a "top pick" by Barron's (subscription required). The publication called the tech giant "one of the world's great businesses," and "an impressive growth company" in spite of its size. The upbeat piece has GOOGL shares trading 1.8% higher at $778 -- though they're still slightly in the red on a year-to-date basis.

Not everyone's a fan of the stock, however. Options traders have recently been buying to open GOOGL puts over calls at an accelerated rate. Specifically, the stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 0.88 -- just 7 percentage points from a 12-month peak.

Echoing this put-skew is Alphabet's Schaeffer's put/call open interest ratio (SOIR). At 1.00, this ratio indicates put and call open interest are even among options expiring in the front three-months' series. However, the SOIR ranks in the high 83rd annual percentile, hinting at a relative preference for puts over calls.

No matter which options traders are interested in, right now is a good time to purchase premium on short-term contracts. GOOGL sports a Schaeffer's Volatility Index (SVI) of 21%, sitting south of 99% of all other readings taken in the prior year. In other words, the options market is pricing in historically low volatility expectations at the moment.

Returning to the charts, GOOGL has had a good day but an unimpressive year. Things have been tough since the stock's late-October peak, too, with the shares shedding 7.3%. Fortunately, it appears GOOGL stock may have established a foothold at its ascending 320-day moving average, which previously served as support in late June.

Alphabet Inc's (NASDAQ:GOOGL) near-term struggles have been shared by its fellow "FANG" peers, including Facebook Inc (NASDAQ:FB). In fact, earlier today, the European Union called out both GOOGL and FB for not curbing hate speech quickly enough.

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