Doug Busch

As Netflix stock fades, with a soft reaction to its earnings on Friday, a different class of internet plays in Reddit, DoorDash, and Alphabet are stepping up.

Reddit's year-to-date return may appear underwhelming at first glance, off 13%, but that figure masks a powerful move. Over the past three months, the stock has surged nearly 50%, outpacing the broader market.

On the daily candlestick chart, the important $100 level played a pivotal role in shaping a bullish inverse head-and-shoulders pattern, despite a brief dip below that mark in April that formed the head.

The $125 neckline was decisively broken on June 17, confirming the pattern. Now, attention shifts to a developing bull flag with a breakout trigger at $150. A move above that level could set the stage for a sharp rally toward $188 later in the third quarter.

DoorDash is a great example of a stock that keeps offering high-quality points to buy as the price grinds higher. It runs counter to the common belief that opportunity only comes after pullbacks.

On the chart, the stock recently broke above a bull flag pivot at $224, following a clean move through a double bottom at $201.13. The round $200 level acted as psychological support, reinforcing the setup.

Given the broader market looks poised for a healthy pause, patience is warranted. A pullback closer to $225 could offer an attractive opportunity to buy.

It is also worth acknowledging the strength of this move. DoorDash, which recently joined the S&P 500, has more than doubled from the round $100 level it touched in July 2024.

No coverage of the internet group would be complete without mentioning Alphabet. While it may no longer command the spotlight it once did, the stock still holds significant weight as the top holding of the Communication Services Select Sector SPDR Fund, or XLC, XLC, comprising nearly 20% of the fund.

Technically, Alphabet is trading just above a cup-with-handle pivot at $180. The setup suggests potential for a move to fill the upside gap from Feb. 4, which sits just above the $200 level.

It is worth noting that a previous breakout above a bull flag at that same $200 level failed, a move that often signals a trend is running out of steam. In this case, it marked the beginning of a notable decline that didn't end until the stock hit its lows in early April.

Concerns abound, but expect Google to climb its wall of worry.

Write to Doug Busch at douglas.busch@barrons.com

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July 18, 2025 16:31 ET (20:31 GMT)

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