Alphabet (GOOG) Options Signal Bullish Bias: Target $340 Breakout as Earnings Momentum Fuels Short-Term Optimism

• Q4 earnings beat: Revenue surged 12% to $68.5B, with AI-driven search and cloud growth driving optimism.
• AI beta launch: New search feature could boost ad revenue, while $10B buyback signals shareholder confidence.
• Options imbalance: Call open interest dominates at $335–$350 strikes, hinting at a potential short-term rally.

The market is whispering: GOOG’s price drop today hides a setup for a rebound. With technicals aligned for a bullish breakout and options data showing heavy call buying near key levels, the stage is set for a strategic move. Let’s break it down.Bullish Sentiment Locked in OTM Calls, but Puts Signal Caution

Take a look at this Friday’s options chain: 25,645 open interest at the $350 call and 14,380 at $340 scream that smart money is pricing in a rally. The put/call ratio of 0.82 (calls > puts) reinforces this bias. But don’t ignore the 14,991 puts at $320—they’re a hedge against the EU fine’s 1.2% Q1 earnings drag. The block trade of GOOG20260417P300 (600 contracts at $300 strike) adds intrigue: someone’s hedging a long-term bet, possibly against regulatory risks or a broader market selloff.

Earnings and AI News Fuel the Bull Case—But Risks Lurk

Alphabet’s Q4 beat and $10B buyback are textbook catalysts for a stock already trading above its 30D, 100D, and 200D moving averages. The AI-powered search beta? That’s a revenue multiplier if it boosts ad engagement. Yet the EU fine, while manageable, introduces near-term noise. Here’s the kicker: investor perception matters. If the market discounts the fine as a one-off cost (vs. a recurring issue), the bulls will keep winning. But if the regulatory tailwinds shift, those $320 puts could get busy.

Trade Ideas: Calls for the Breakout, Puts for the Safety Net

For options: Buy the GOOG20260116C335 (this Friday’s $335 call). The stock is trading just $0.86 above this strike, and RSI at 86 suggests a rebound is due. If you’re bearish but cautious, a bear put spread at GOOG20260116P320 and GOOG20260116P305 could cap losses while hedging the EU risk. For stock: Consider entry near $315 (30D support) with a target at $340—the level where call open interest peaks. A stop below $313 (200D support) would force a reevaluation.

Volatility on the Horizon: Ride the Bull or Hedge the Bear?

Alphabet’s short-term outlook is bullish, but the path isn’t without bumps. The AI beta and cloud contract wins are tailwinds, but the EU fine and regulatory scrutiny could create headwinds. For now, the options market is pricing in a $340+ move by this Friday. If the stock holds above $315, the bulls have the upper hand. But keep an eye on that $320 put activity—it might be the first sign of a shift. Stay nimble, and let the data guide your next move.