Alphabet Inc.’s Momentum: Fueling Investor Enthusiasm
Alphabet Inc., a technological powerhouse, has experienced a significant surge, with a notable 5% gain in the past month. The burgeoning interest can be attributed to the growing appetite for artificial intelligence.
The recent announcement by Benzinga Neuro regarding Sir Demis Hassabis, the head of Google AI division at Alphabet, spearheading an AI model for research assistance, has further fueled this interest. This model is designed to enhance interdisciplinary collaboration, fostering productive synergies in scientific research.
Furthermore, Alphabet’s autonomous driving division, Waymo, unveiled its sixth-generation hardware in late August. This new initiative aims to lower costs while enhancing performance, especially in challenging weather conditions like winter. S&P Global Mobility predicted a significant uptick in autonomous vehicle sales in the U.S., estimating sales of 230,000 units by 2034.
Surging Trading Activity in Alphabet Stock
Trading activity in Alphabet stock, as indicated by the implied volatility (IV) in the options market for GOOG, has been on the rise. The IV rank, measuring the current IV relative to the trailing 52-week average, spiked from 28% in mid-September to nearly 75% by the latest market close.
Implied volatility reflects the market’s anticipation of price movements, whether up or down. High IV levels lead to elevated option premiums due to heightened demand.
The surge in trading activity can be attributed to the upcoming third-quarter earnings report of Alphabet scheduled for Oct. 22. While recent trades have leaned towards bullish sentiment, there have been reports of bearish options trades by market whales, indicating a diversity of opinions.
Direxion’s GOOGL-Centric ETFs: GGLL and GGLS
Amid the intense market action surrounding Alphabet, Direxion has found an opportunity to provide leveraged and inverse exchange-traded funds focused on GOOGL, catering to traders looking to capitalize on quick directional plays related to the tech giant.
For those bullish on Alphabet, the Direxion Daily GOOGL Bull 2X Shares (GGLL) aims to achieve daily investment results of 200% of GOOGL’s performance. Conversely, for pessimists, the Direxion Daily GOOGL Bear 1X Shares (GGLS) seeks 100% of the inverse performance of Alphabet’s Class A shares.
The GGLL ETF Performance
- Facilitating a robust return of over 19% since the beginning of the year, GGLL exhibits strong momentum, with a nearly 23% climb since the close of Sept. 10.
- Increased trading volume ahead of the upcoming earnings announcement provides bullish traders with encouragement.
- Prospective speculators are watching for a breakthrough above the $38 resistance level to signal a compelling trade opportunity.
The GGLS ETF Performance
- In contrast, Direxion’s GOOGL-focused bear fund, GGLS, has experienced a 19% decline year-to-date, struggling below both the 50-day and 200-day moving averages.
- Current challenges include maintaining support above $14, although the fund has shown resilience, bouncing from a low of $12.34 earlier this year.
- Bearish options activity combined with recent price action suggests a potential shift in sentiment among investors.
Photo Credits: Featured photo by AS Photograpy on Pixabay.
