Google (GOOGL) has made new all-time highs since a low on 31 March. The move from that low is described as a five-wave impulse under Elliott Wave.
From 31 March, wave (1) ended at $342.32 and wave (2) ended at $331.10. Wave (3) then advanced and broke into a smaller impulse.
Inside wave (3), wave 1 reached $353.18 and wave 2 fell to $344.21. Wave 3 rose to $378.79, wave 4 pulled back to $365.82, and wave 5 climbed to $391.39.
This completed wave (3) at a higher degree, followed by wave (4) down to $379.05. Price is now moving towards completing wave (5), which would finish the cycle that began on 31 March.
After wave (5) ends, a larger three-wave correction is expected. In the near term, the setup remains valid while price stays above $331.10.
We are seeing a structure in Google’s price action that looks very similar to the one from last year. In 2025, we saw a five-wave rally starting on March 31 that led to a significant, multi-week pullback. The current advance is showing similar signs of exhaustion after a strong run.
The stock has performed well this year, currently up over 15% year-to-date, driven by a solid first-quarter earnings report in late April where revenues beat expectations by nearly 2%. That report, which also initiated the company’s first-ever dividend, pulled a lot of buyers into the market. This surge in optimism often occurs just as a market cycle is about to turn.
Given the potential for a repeat of last year’s corrective pattern, traders should consider buying put options with June or July expirations. This provides a direct way to profit from a potential decline in the coming weeks. Look for strikes that are slightly out-of-the-money to balance cost and potential reward.
For those wanting a more conservative approach, selling a bear call spread is a viable strategy. This allows you to generate income if Google’s stock moves sideways or drifts lower, which is a common feature of the three-wave corrections we expect. The position profits from both a price drop and the passage of time.
If you are already holding a long stock position, now is the time to protect the impressive gains made since January. Buying protective puts can act as insurance against the anticipated pullback. This strategy allows you to hold your core position while capping your potential downside.
The key level to watch now is the 50-day moving average, which has supported the price during this entire rally. A decisive break below this technical level would be our confirmation that the larger corrective phase has begun. Until then, the uptrend remains intact, but we are preparing for the turn.
