Trade Ideas: Yahoo! (YHOO)

By Jul 18, 2013, 9:14 AM Author's Blog  

Yahoo (YHOO) jumped to a five-year high Wednesday after the company said during its Q2 earnings report that Alibaba’s profit tripled in the first three months of the year. Yahoo has a 24% ownership stake in the privately held Chinese e-commerce company Alibaba Group Holdings. Shares of the Sunnyvale, Calif.-based web portal gained 10.34% to $29.66 at 4.00 p.m. in Nasdaq for the highest intraday price since May 2008.

Technically speaking, Yahoo has seen several upgrades recently and the stock has been in a steady uptrend since Sept. 2012. After a four month consolidation phase started in May of 2012, it has stair-stepped its way up from under $15 a share to over $29 a share. YHOO is up 12.86% in the last month, up 48% in the last six months, and up $13.92, or 89%, since this time last year. While the name may be short-term overbought here — YHOO’s share price has an RSI value of 73.15 — any pull back should be seen as another consolidation phase with an upward bias.

Unless key support levels currently at $29 and $27.07 are convincingly penetrated, the buy the dips strategy is still the higher probability trade. We believe the stock will continue to steadily uptrend given that both its trailing P/E and forward P/E ratios are at 8.60 and 17.80, respectively. Yahoo’s earnings are expected to increase over 14% in FY 2014 and at an average of 10.50% annually for the next five years.

Trade Ideas: Yahoo! (YHOO)

The longer the ticker holds above its all time closing high of $29.66, the greater odds we could see higher prices moving forward.

$32.50 is our short-term target to the upside.

Disclosure: No Position

  • SHARE:
  • Share on StockTwits


SPY201.79  chart+3.88  chart +1.96%
GOOG504.89  chart+9.50  chart +1.92%
AAPL109.41  chart+2.665  chart +2.50%
TSLA205.82  chart+8.01  chart +4.05%
BBRY9.98  chart+0.47  chart +4.94%
NFLX333.65  chart+17.21  chart +5.44%
FB76.11  chart+1.42  chart +1.90%

Nikkei17189.74  chart+370.01  chart +2.20%
Shanghai0.00  chart0.00  chart +0.00%
UK6336.48  chart+4.65  chart +0.07%
France4111.91  chart+18.71  chart +0.46%
Germany9544.43  chart-19.46  chart -0.20%