Watching Yahoo! (YHOO) and Alibaba? Here is my take. (May 12, 2014)
Discussed in this article: Yahoo! Inc. ( $YHOO )
I want to look at Yahoo ( NASDAQ:YHOO ). The markets in kind of like a raging bull market here, it just kind of started snorting today, although it’s kind of been a stealth deal under the radar, everybody’s looking at the momentum names and meanwhile the large-cap stuff has just been kind of chugging along. But I want to look at Yahoo ( NASDAQ:YHOO ); there’s a lot of chit-chat about the Alibaba IPO, which Yahoo ( NASDAQ:YHOO ) owns a big chunk of, later this year and what that’s going to do to the price of Yahoo’s ( NASDAQ:YHOO ) stock; I would say that that’s going to be then, this is now.
As I look at this, you see the 200-day moving average here, the stock had been in a really nice uptrend, just dragging the 200 up along with it, and now it’s almost trading sideways. Meanwhile the stock kind of lost some momentum here, started pulling back, and that drags the 50-day moving average down to where we’re just about ready to have a bearish crossover, where the 50 drops below the 200, I would say probably in another week or so you would get that.
But here’s the deal, right now we’ve got big volume here, like this is starting to gyrate more and more, I guess you could say, “Well it’s below the 200-day moving average and that’s a bad thing.” I would say not really, because it’s effectively holding at the 200-day moving average, we’re getting lower lows, so this is really only something that I would be bearish on if the stock starts trading below 32.00, that’s $2.50 below where it is right now.
But if this stock starts moving higher, and it was up today over 2 percent, which is kind of a big move, twice the S&P, but if the stock starts trading above this level, I’m going to say like $36.00; this is a bonafide break out and this could blast through $40.00 before the IPO. Even then, what is the valuation after the IPO, everybody talks about it but nobody really knows, so I think what you need to do is just follow the chart. Right now on this you’ve got support here, we’ve got this down trending resistance line, here’s really new support, look for that kind of move.