Here’s how to play Google going into Q1 earnings

Alphabet Inc. (NASDAQ:GOOGL) shares are trading near all-time highs going into Q1 earnings. The company has a history of reporting EPS numbers that beat the consensus estimates quarter after quarter and this quarter might not be that different.

For Q1 2024 analysts are expecting the company to report EPS of $1.50, a sharp jump from the $1.17 it had reported in the same quarter of the previous financial year.

Last quarter Google managed to beat both EPS and revenue estimates by $0.04 and $1.03 billion, respectively. However, the stock still catered by more than 5% the next day. While we might not know yet how the stock might react this time going into earnings, the charts do offer a clue about how to play the stock going into earnings.

Long term bullish trend remains intact

In the long-term daily charts, we can see that Google’s stock started a new bull run in March 2023 that has continued to this day. There were minor dips in between, but the stock recovered from them quickly.

GOOGL chart by TradingView

As the stock is trading near all-time highs most momentum indicators are positive and pointing towards the stock continuing its upward march, which is good news for long-term investors. Unless the stock breaks below this long-term bullish trendline there is no reason to worry in the medium-term.

The short-term play

The short-term chart for Google paints nearly the same picture that the long-term chart does. On the hourly charts, we can see that the stock has been on a continuous upward journey since March 6 with strong momentum.

On top of that the MACD indicator, which had turned negative on April 15 again turned positive yesterday (April 23^rd). Hence, bulls are in complete charge of the stock, as of now.

GOOGL chart by TradingView

Considering that we recommend a long position here. Traders can buy Google here at around $158-$160 with a stop-loss near $146. For traders, who wish to take a contrarian stand it is advisable not to short the stock outright, instead do so by using options.

One can buy Google’s $150 Strike Put expiring on May 17 at around $2.4. This way they can limit their losses but can have unlimited gains if the stock collapses after Q1 earnings.