Though based in Amsterdam, Yandex operates a major Russian Internet search engine. Along with search, it provides mobile services that allow users to connect to the Internet, as well as several online products, such as aggregated news and information services, an e-commerce arena, email, mapping service and cloud-based storage.
Yandex rebounded a bit after reporting a solid earnings beat on July 29, trading around the $31 level, with its 52-week range being $21.70 to $45.42. Profit Scanner powered by Recognia has identified a technical pattern that could take YNDX 17% to 20% higher in the month of August.
At the July 30 close, Profit Scanner found a bullish Symmetrical Continuation Triangle pattern on Yandex’s chart. This pattern tells traders that Yandex’s price has broken upward out of a consolidation period, suggesting that a prior uptrend will continue. The pattern has a target range of $36.25 to $37.50 and emerged on volume of more than 2 million shares.
Yandex pulled back in Thursday’s trading, but there is support at $29.90, so as long as that level holds, traders can feel confident entering long positions.
There is resistance at $32.25, so traders looking for more confirmation of the uptrend may wish to wait and establish positions after Yandex closes above that level.
If you do take a position, a stop loss is always a good idea. Profit Scanner identified a close below $29.43 as a tight stop, but traders who are even more conservative may wish to use a close below support at $29.90 as a signal to cut and run.
Since the pattern’s timeframe is short term – 22 trading days, or in about three weeks, coinciding with August options expiration – an option trade is a speculative way to play this pattern without requiring much capital. Profit Scanner does not make recommendations for options trades, but if you view Yandex’s option chain sheet, you’ll see several strikes with ample open interest, which is imperative in summer trading.
Yandex does offer weekly options, but since this is a speculative trade to begin with, traders may wish to consider the more liquid “regular” monthly options that expire on Aug. 16. There is significant open interest at the YNDX Aug. $30 calls, which are trading around $2, or $200 per contract. If YNDX hits the lower target of $36.25 by Aug. 16, the value of those calls could easily double, perhaps even triple.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.