doktor_justice
Long

Yahoo Bullish Flag Too Good To Be True

NASDAQ:YHOO   YHOO
- Pattern bears resemblance to a bullish flag , with more or less supporting trends in volume (far from perfect)
- MACD is close to buy signal, RSI didn't really fall below 50 (mildly supportive)
- Break out from flag should happen with substantially higher volume (not like today), so no real confirmation here yet
- Should (and only if) the confirmation arrive pattern hints at target levels well above 60, stopping slightly below 50D SMA gives satisfying risk/reward ratio, even when not taking into account the whole length of the 'flagpole'
- Nevertheless that's hard to truly believe in, unless AOL             merger and Alibaba+Yahoo Japan spin-off rumors prove to be true or BABA completes its very similar flag( ish             ) pattern (that ruined my short attempt) pulling YHOO             along (question is then why not long BABA?)
Both BABA and YHOO charts tell us that there's a technical potential towards the upside. Quite significantly. I agree that it's a good risk/reward and in any case the charts don't give signs for chances of significant drop, so if the patterns fail to materialize I don't suppose you can lose much. Only a voice in my head tells me to be careful here, it has no grounds based on the charts or anything.
+1 Reply
Same feelings here. Looking into sum-of-the-parts valuation the current price still seems somewhat fair even with rigorous assumptions on multiples for operation and liquidation value of stakes in BABA and Yahoo Japan. Assuming there's no collapse in BABA and/or internet media valuations YHOO should have limited downside from valuation perspective (you have to use extreme parameters to justify significantly lower values for YHOO).
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