About 3 weeks ago, the article described a bullish outlook on Google using an Elliott Wave approach. It noted three waves down from the February highs, then a breakout above a downward channel after a reaction from a yellow-box support zone.
It then reports a strong rise, with the price now trading at new highs. It adds that some traders may take profits or move stop levels higher due to uncertainty about how far the rise may run.
On the updated chart, it says there is still scope for a retest of the upper line of the impulsive channel, around 380, if the Elliott Wave structure holds. It also says there could be a near-term pullback towards 330 as first support, particularly ahead of earnings.
It references a recorded live webinar streamed on 27 April for further detail.
We are looking at a very similar setup to the one we saw this time last year, when our Elliott Wave view correctly anticipated a strong rally in the spring of 2025. That breakout from the channel did indeed propel the stock higher, eventually testing the $380 target zone we had outlined in the following months. The near-term pullback to $330 that we thought was possible ahead of the 2025 earnings report was very shallow, as a strong report ignited another leg up.
Fast forward to today, the stock is up over 18% year-to-date and trading near $415, putting us in a familiar position of strength right before an earnings release. Implied volatility is currently elevated at 55%, placing it in the 78th percentile for the last twelve months and making options premium expensive. This high cost suggests a significant “volatility crush” is likely after the numbers are out, which could hurt traders who simply buy puts or calls.
For traders who remain bullish and expect another positive surprise, selling an out-of-the-money put credit spread for the upcoming May expiration could be a sound strategy. This allows you to capitalize on the rich premium and gives you a cushion if the stock pulls back modestly. A defined-risk trade like this is often more prudent than buying expensive call options right before a major news event.
Given the strong rally, some caution is certainly justified, and trailing stops on any long positions is a sensible defensive move. Recent options data shows a notable increase in open interest for puts expiring next month, indicating that some traders are actively buying protection. Therefore, a neutral strategy like an iron condor could be effective, designed to profit from the expected drop in volatility as long as the stock stays within a specific price range post-earnings.
