FAANG stocks have been in focus this week, amid the fallout from Facebook’s (FB) data harvesting scandal. While FB shares are pacing for their worst week in years, Alphabet Inc (NASDAQ:GOOGL) stock is currently staring at a 3.7% week-to-date deficit — down 0.3% today to trade at $1,092.96. And if history is any guide, GOOGL stock could be headed for even bigger losses during the upcoming holiday-shortened trading week.
According to Schaeffer’s Senior Quantitative Analyst Rocky White, Google parent Alphabet has been one of the worst stocks to own on the S&P 500 Index (SPX) during Easter week. Specifically, GOOGL has averaged a loss of 0.58% in the four-day period leading up to Good Friday, going back 10 years, and has finished the week higher just 30% of the time.
Considering Alphabet stock has tacked on an impressive 29.3% year-over-year, a similar move to the downside would do little to stall the tech stock’s longer-term trend. However, it could have the shares testing a trendline that’s connected higher lows since an early February bounce off their 200-day moving average.
Given the stock’s strong 52-week return, sentiment toward GOOGL is upbeat. All but five of the 32 covering analysts maintain a “buy” rating, and just 0.61% of Alphabet’s float is sold short.
This optimism is seen in the options pits, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock’s 10-day call/put volume ratio of 1.68 ranks in the 85th percentile of its annual range, meaning calls have been bought to open over puts at a quicker-than-usual clip.
Regardless of whether it’s calls or puts, Google stock has consistently rewarded premium buyers over the past year, based on its elevated Schaeffer’s Volatility Scorecard (SVS) reading of 82 (out of 100). In other words, GOOGL has tended to make outsized moves in the last 12 months, relative to what the options market has priced in.
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