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

LEAVE A COMMENT

SPY197.80  chart+0.08  chart +0.04%
GOOG590.60  chart+1.58  chart +0.27%
AAPL99.02  chart+1.349  chart +1.38%
TSLA224.82  chart+1.25  chart +0.56%
BBRY9.95  chart-0.32  chart -3.12%
NFLX424.66  chart+2.80  chart +0.66%
FB74.92  chart-0.27  chart -0.36%

Nikkei15577.93  chart+48.529  chart +0.31%
Shanghai0.00  chart0.00  chart +0.00%
UK6788.07  chart-3.48  chart -0.05%
France4344.77  chart+14.22  chart +0.33%
Germany9598.17  chart-45.84  chart -0.48%