Don't Ignore This Chart!

Yahoo (YHOO) Could Use A Little Yahooing


In Calgary, we use the word Yahoo way more often than the rest of the world. Our primary usage is during Stampede Week or The Greatest Outdoor Show On Earth. The bars are advertising "the most fun you can have with your boots on", the streets are filled with hay bales and stampede breakfasts, the chuckwagons are running, the farmers are baling hay, and it's almost impossible to be grumpy. The smiles, laughter, and the constant chant of "Yahoo-o-o-o" permeates the foundation of work hard, play hard. There is the odd bit of frac-fluid involved. But we are not here to talk about Calgary's level of enthusiasm as oil hits 6 year lows, railways keep spilling crude and pipeline prevention is not used as an expression of transportation safety. The city couldn't be quieter. We are almost as glum as the Yahoo (YHOO) stock price. Here is the chart!

Chart 1

After getting bucked off its highs by 20%, YHOO has been skidding sideways in the dirt since the start of February.

Even cowboys that have been kicked get up faster than that. However, a dust cloud of robust rodeo action could be kicking in here. Tomorrow is Alibaba Lockup Expiration which I mentioned about a week ago. Here is the link. Alibaba Approaches Lockup Expiration Day. Both Alibaba (BABA) and Yahoo (YHOO) are waking up this morning with a little more gusto than previous days. Maybe they started drinking Kicking Horse Coffee. Link to that is here. Starting their day with a little 454 Horsepower brew.

I am not a specialist on fundamental stock price valuations, but the rumour around the campfire is that Yahoo currently trades about the same as the value of Alibaba stock that it owns and you get the rest of the company for free. While Yahoo is still struggling to monetize the readership, free seems awfully cheap! Anyway, it might be time to poke the fire and see if we can get a few sparks flying in praise of a Whoop-it-up Yahoooooo! I particularly like the SPURS (S&P Relative Strength) shown in purple up top. It is trending sideways and any kick here would mark an exit from the dustbin saloon. The price action today looks like it is trying to get out of Dodge as well.

Good trading,
Greg Schnell, CMT

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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