Stock to Sell #6 – Yahoo (YHOO)
Yahoo (NASDAQ:YHOO) broke from a cup-and-handle consolidation in October and ran from $16.75 to over $19. However, profit-taking should be considered here since the stock is selling at almost 17 times next year’s earnings and is over 20% above its 200-day moving average — a clear case of over-valuation. The MACD indicator flashed a sell signal in the first week of December.
Shareholders who would like to take a chance on another move up should place a trailing 10% stop-loss order under the current price in order to protect against a violent reversal.