GOOGL is currently trapped between $341 and $350. The rejection from the $373 peak and subsequent drop to $345 is tied entirely tied to Alphabet's massive equity raise.
Underwriters currently are managig a $30 billion dollar public allocation anchored near a $350 cost basis. To hedge this inventory during distribution, they sold heavy blocks of July 17th $350 covered calls. When retail buying pumped the stock, market makers were forced to dump long stock hedges at the first sign of negative news, sparking an automated cascade. The banks need these contracts to expire worthless on both July 10th and July 17th and they'll defend this range heavily for now.
This structural cap has a fixed lifespan linked to three June/July milestones:
- Dow Inclusion (June 26): Passive funds must blindly buy roughly 7 million shares during Friday's Closing Cross to mirror the index.
- July 17 Expiration: The massive $350 open interest clears, ending the underwriter stabilization period.
- Earnings and Gemini (July 22): Google's Q2 earnings and expected Gemini 3.5 Pro launch hit right as the underwriter ceiling dissolves (my money is Gemini 3.5 pro launches around the same time as other models release and most likely between July 10th and 18th.
Trading June and July weeklies fights a multi-billion dollar algorithm and risks heavy post-earnings IV crush. The play is buying calls for an August 21st expiration to give the post-earnings price a little runway.
See pics for my positions. I plan to roll these calls into August 21 dated with a $350 strike ASAP. I have a price target of $380-390.