Alphabet (GOOG) Options Signal Bullish Bias: Target $340 with Caution on $285 Puts Amid AI-Driven Momentum

• GOOG plunges 2.87% to $312.66, breaking below its 30-day support at $284.50.
• Options data shows 8039 open interest at the $340 call (this Friday’s expiry) and 10,251 at the $285 put—hinting at a tug-of-war between bulls and bears.
• RSI at 80.5 suggests overbought conditions, but MACD (13.73) and bullish Kline patterns keep the long-term trend intact.

Here’s the takeaway: GOOG’s options market is pricing in a high-probability rally toward $340, but today’s sharp drop has created a critical inflection point. Let’s break down why this is a setup worth watching—and where to draw the line on risk.

Bullish Calls at $340 vs. Bearish Puts at $285: A Battle for Control

The options chain tells a story of conflicting narratives. This Friday’s $340 call (GOOG20251212C340) has 8039 open interest—the highest of any strike—while the $285 put (GOOG20251212P285) has 10,251. That’s not just noise: it means smart money is hedging both a breakout and a potential pullback. The put/call ratio of 0.745 (calls dominate) leans bullish, but the sheer volume at $285 warns of a psychological floor.

Block trades add intrigue. A recent 800-lot buy of the GOOG20250919C245 call (expiring Sept 19) and multiple large call trades in October 2025 suggest institutional players are locking in long-term exposure. Yet, if GOOG closes below $312.10 (today’s intraday low), the $285 put could become a self-fulfilling prophecy as stop-losses trigger.

AI News vs. Legal Headwinds: Which Story Wins?

Alphabet’s recent headlines are a mixed bag. The $2.5B NeuralForge acquisition and AI Pro Suite launch are clear tailwinds, especially with JMP Securities upgrading the stock to "Market Outperformer." But the EU’s $2.2B fine and a class-action lawsuit over data privacy inject uncertainty.

Here’s the twist: investors seem to be discounting the negatives. The $10B stock buyback announced Dec 1st and the 2026 AI roadmap (including SearchX and $99/month AI tools) are fueling optimism. Still, the EU’s Q1 2026 algorithm changes could weigh on ad revenue if not managed well. For now, the market is betting on execution over regulatory noise.

Actionable Trades: Calls for the Breakout, Puts for the Safety Net

If you’re bullish but cautious, here’s how to play it:

• For a short-term breakout: Buy the GOOG20251212C340 call (this Friday’s expiry). If GOOG closes above $321.23 (today’s high), this strike could see explosive gains. Stop-loss below $310.
• For downside protection: Buy the GOOG20251219P285 put (next Friday’s expiry). It’s a cheap hedge if the stock retests the 200-day moving average ($206.49) but risks expiring worthless if the rebound holds.
• Stock entry: Consider buying GOOG near $284.50 (30-day support) with a target at $320. If it breaks above the Bollinger Upper Band ($336.23), re-evaluate for a higher target.

Volatility on the Horizon: Prepare for a Bumpy Ride

The next 72 hours will be critical. A close above $321.23 could reignite the bullish trend, while a drop below $312.10 risks a test of $285. The options market is pricing in a 70% chance of staying above $285, but don’t ignore the block trades at deeper puts—they suggest some big players are ready for a fight.

Bottom line: This is a high-conviction setup for AI-driven bulls, but keep a tight leash on risk. The RSI’s overbought reading and MACD’s positive divergence hint at a possible pullback, but the long-term trend remains intact. Stay nimble, and watch those $340 calls like a hawk.