YHOO is on quite a tear lately. I see that it is trading between two tight parallel trendlines as it enters a consolidation zone right now, which is looking like it could be another very bullish pattern...a pennant. Volume is trending down within that pattern right now, so buyers are taking a short breather. The price is nearing the upper trendline which has served as resistance. The way I would normally play this type of strongly trending stock, is a pullback to the lower trendline or to one of the moving averages. This offers a very high reward to low risk because the moment the price goes below the trendline, it's a sell. That opportunity has occurred 3 times recently and every time, the price has bounced nicely.
This stock was a reader request on Stockineer last night so I did a write up with charts there, but I'm summarizing for you guys on this post. Good luck...you guys have done well lately. Too bad I wasn't watching and missed the boat, but I'll look for that pull back and may take a nibble.
For those guys still following the charts. I just posted another on Stockineer a few minutes ago. It's part of the original article and is essentially a running documentation. Here's the text summary but obviously I can't post the chart here:
"YHOO has developed into two parallel trading channels. Prices tend to move in ratios to the previous move and in this case, it’s a good example. Price is now hitting its head on $30 resistance and a breakout should send it back into the upper channel. However, my main concern at this point is the negative divergence that’s been going on for quite some time. Couple that with indicators reaching resistance and it appears that a pullback may be in the cards before a breakout can take root. Of course, follow the price action. A breakout is a breakout. Check out the chart below to see what I’m talking about."
I hope this helps. YHOO's been on a really nice run so congrats guys. Hold onto those profits :-)
As I look at the after hours quotes, YHOO is down on pretty high volume leading me to believe this isn't a head fake that these guys often pull. $23 offers the best near term support, so hopefully longs can get a bounce from it to maybe retrace the trendline that may break tomorrow. Another piece of advice that has served me well is not to trade in the first 30 minutes of the market open. With a lot of fear kicking in right now, you may see a gap down but an immediate rise...just keep that in mind. I put up an updated chart for you guys if you want to see where the price stands. Good luck guys, don't panic, but do have a plan.
Thank you very much. I would have liked to do a more in depth analysis, but it was late last night and I was already losing an hour sleep with the time change. It is a great stock to discuss right now so I just wanted to start the discussions.