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:

LEAVE A COMMENT

SPY187.74  chart+0.29  chart +0.15%
GOOG524.58  chart-2.36  chart -0.45%
AAPL567.81  chart+43.06  chart +8.21%
TSLA207.61  chart-0.38  chart -0.18%
BBRY7.295  chart-0.065  chart -0.88%
NFLX342.50  chart-11.00  chart -3.11%
FB61.33  chart-0.03  chart -0.05%

DJIA Fut16330.00  chart-9.00  chart -0.06%
Nasdaq Fut3718.00  chart+19.00  chart +0.51%
S&P Fut1872.80  chart+21.80  chart +1.17%
Oil Fut102.15  chart+0.02  chart +0.02%
Gold Fut1311.80  chart+17.1001  chart +1.32%

Nikkei14404.99  chart-141.279  chart -0.97%
Shanghai0.00  chartN/A  chartN/A
UK6703.00  chart+28.26  chart +0.42%
France4479.54  chart+28.46  chart +0.64%
Germany9548.68  chart+4.489  chart +0.05%