Here’s the skinny on Yahoo! (YHOO) (December 09, 2015)
I want to look at Yahoo ( NASDAQ:YHOO ) in this video. You can see a lot of chopping around here; huge volume today. The stock really didn’t really do that bad. Here’s the deal: the news is Yahoo ( NASDAQ:YHOO ) is not spinning off their Alibaba stake. That’s something they had talked about doing, I think they even had created a company, if I recall correctly, it was called SpinCo, which is a really creative name. Anyway, they’re not going to spin that off. The stock gapped way up on that initially and then traded down. I’m looking at this as a potential buying opportunity. Everybody’s calling for the CEO of Yahoo, Marissa Mayer’s head. I’m certainly not going to do that. First of all I’m not qualified to. Second, I don’t know, what are you going to do?
Lets assume for a minute that Marissa Mayer were to leave. It would probably pop the stock; the stock would probably move higher. Lets say she’s going to stay. Well, that doesn’t do anything to the stock because she’s there now. And while a bunch of commentators are talking about her leaving, that’s no sign that she’s going to leave. So I think that’s really a non-issue. I would say it’s a “net positive”. Whether she stays or whether she goes the stock is either going to drift sideways or move higher. It’s not like if Mark Zuckerberg left Facebook and then we’re wondering if the stock is going to move higher or lower. Marissa Mayer is in the news because she’s a female CEO, that seems to get a lot of extra attention. But the bottom line is she’s doing the best job that she can, which wasn’t too great down here but now the stock is recovering.
So here’s my suggestion, it’s pretty easy. If you’re a “Yahooian” (you-hoo for Yahoo) make sure you note the weekly chart. This stock, 40-week or 200-day moving average, is rolling over. That’s a negative, that was the bottom. Now this stock is working on a base. The only reason you’re buying a stock is because you think it’s moving higher. If you don’t think it’s moving higher you’re not buying it. Now, keep that in mind, because right now this stock is chopping around and it’s kind of right in the middle of the range. If the stock happens to breakout above 36.00 you’re probably going to see a bigger move higher. I don’t really care too much about this 200-day moving average because it hasn’t really proven to be particularly relevant.
All I really care about is this high here, 36.39. You want to see essentially a reversal of this high volume move. You want to see a rejection by the bulls of this “gap and crap”. So the high here, 35.84 (I just use 36.00 because it’s and even number), if the stock starts moving above 36.00 then you go ahead and buy this stock. If it’s not doing that then why buy it? The real support is down here around 32.00. The bottom line is this: Yahoo ( NASDAQ:YHOO ) has been in the news a lot lately and it’s because of it’s CEO, it’s because of the Alibaba thing. But the bottom line is, the stock has hit the bottom. Now it’s kind of building a base. It’s not really going to do too much, but that’s even more reason why you want to really, really be focused on you entry.
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