YHOO - the bull case

If surinotes #2 senario happens monday then my take on Yahoo would be wrong and I would look at yahoo as being bullish instead of bearish. I try to anticipate but if proven wrong I just accept it and move on reversing my previous take on the market. Hopefully, I would exit without much loss and take a reverse position. But as it stands I lean a bit towards the bearish side when I take several things into consideration about this gap senario in yahoo.
 
xxxskier - you are in yahoo for longterm and thus are discussing it from a longer time frame and you could very well be correct in your anticipation of prices. However, ALL my posts on yahoo are extremely short term like the next 1 to 3 trading sessions. Just wanted to clarify that. I lean bearish for yahoo for the next session or two!
 
pinabetal, although i'm more bullish on yhoo then you, i can't really disagree with your anlalysis....which sounds very wykoffish (sp).....which i also use.

i'm in this for the long-term, so where it trades 10/8 doesnt matter to me. i've been watching the activity on the Jan 08 30 calls. very encouraging.
 
pinabetal, thanks for that clarification

knowing your time frame and your objectives are critical. we may both be right.
 
I could agree with you that it has been bullish for a while now however, it do appear to be turning bearish on weekly and monthly charts. That is, longterm it appears to be setting up for a bit of bearish action. So, I would really watch the market on it. I have heard of the wycoff dude but i dont know a whole lot about him but understand he did trade along these lines of reading the bars. I have found they do tell a story. Not always the correct story but enough of times they are correct enough to make some dinero. Wish you the best! So far you doing right good in yahoo it appears! My longterm investment is in physical silver.
 
pinabetal, i have a question for you. when you mentioned that volume was not has high as it could of been on 10/5, i'm wondering what is your rationale for that? i tend to operate with the assumption that "good volume" that can sustain a move is about 150% of normal volume, and when it goes much higher then 150% you have a lot of weak momentum players piling in that will bail at the first sign of trouble.

looking forward to your comments.
 
When I speak of good volume I mean relative to other volume of the same chart. I just visually look for it. See the chart attached for an explanation. While 10/5 volume was a slight increase over 10/4's volume it still was only about average volume. In my opinion that generally (but not always!) isn't enough volume to indicate that the deep pockets are heavily involved in taking long postions in this gap up on 10/5. So my logic would be: IF they arent going long, then they must have engineered this gap up to take out short stop losses and at the same time create a good shorting position for themselves. In other words IF they were bullish on Yahoo why didnt they indicate so by taking large long positions? They arent selling to the public in any amounts either or that would have also shown up as heavier volume too. Now IF the volume is excessive in such a senario then then they are probally selling their long positions and and supply is overcoming the demand. In conclusion, I see an upward price movement on just barely above average volume and a narrow spread with a weak close that just doesnt ring right to me. It seems to be telling me that this move up was engineered to take out stop loses and create a good shorting position for the deep pockets. They apparently havent shorted alot yet (as that would have shown up in the volume too) but they have sold some or the range of the bar would have been wider. Their selling kept it narrow. But it obviosely wasnt enough selling to appear as such in the volume bar. The move up is too dramatic of an up move and not enough volume behind it to show they are supporting the move up. So, if they didnt support the upmove it was engineered. And if they havent yet sold heavily then it could go up a little more before it heads down. But overall my take is that the smart money is bearish for the next few days therefore I would be bearish.
 

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i think you may be right about the short-term. i think its very possible it will stay in a channel between 24-28 until earnings on 10/16. thanks for the reply, btw.
 
almost 25% gain in one month. not bad.

too bad no one else here saw it coming.

according to the Wall Street Journal, it looks like yhoo may catch a lot of people off guard and actually go up even more:

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WSJ.COM/Earnings Preview: Yahoo Reports Tuesday
11:00 AM ET - Dow Jones News
Yahoo Inc. (YHOO) - reports Tuesday, Oct. 16
The embattled Internet services company, overshadowed by Google Inc. (GOOG) in recent years, is undergoing a 100-day strategic review by co-founder Jerry Yang, who stepped in as chief executive in June. Meanwhile, Yahoo's overhauled search-advertising system continues to kick in. Merrill Lynch analysts see revenue per search increasing 15% year over year in the third quarter, up from a 12% rise in the second period. That should help blunt the effect of any further erosion in Yahoo's share of queries and, as well, its continuing loss of display-ad dollars to niche content sites and social networks. Display-ad revenue will receive a boost from Yahoo's recent acquisition of Right Media.

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and that article fails to mention that yhoo's china investment in the Alibaba Group is abou to pay off in a huge way when alibaba.com IPOs very soon. it will be a major boost to yhoo's liquid assets. they already have 2B cash and several billion more certainly can't hurt.
 
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