Yahoo! Inc. (NASDAQ: YHOO) — This large-cap information technology giant had been trading within a very narrow zone since early 2009.
Then, in early April, YHOO in a very convincing run broke from a channel downtrend jumping from $16.50 to $18.50 in less than two weeks.
But “the big breakout” turned into a false breakout, which was confirmed by a death cross. By June, it was clear that YHOO had resumed its downward bias.
The stochastic recently flashed a buy signal, but for a stock in a steep downtrend this should result in nothing more than a shallow rally that can be used to either sell the stock if you are long, or short sell it. Short sellers will want to put a stop-loss on YHOO at $16.
The downside objective for the stock is $11.
If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net.
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