Is the bottom in for Yahoo!

• Posted by Greg Harmon
• on March 21st, 2016

Looks like I got Marissa’s attention. Last fall I was invited to Yahoo Finance headquarters in New York to meet with their developers. They were looking to understand my process and how I might use Yahoo Finance in it, to help remodel and improve the site. I thought it was a great idea but hesitated a moment. but it was just a moment until Charlie Hartel started talking about my Indians would be in town playing the Yankees during the trip. I was all in. It was a great presentation with a lot of questions from the developers.

With just 5 minutes left until the end of the time slot I thought I had made it through unscathed. That was when the question came. Yahoo stock ($YHOO) had already fallen from a peak at 52 to about 36. Down over 30%, but still in a solid downtrend. The question, “What do you think about Yahoo stock?” Everyone in that room had Yahoo stock. When the question came I felt like they all owned about 100,000 shares each. I remember telling them that the stock was in a prior consolidation area, so maybe it would find support there. I thought I had gotten off clean.

Then the follow up, “what if it doesn’t?” Yikes! So I went through the cart and told them that if the price fell below 33 it could drop a lot further. This was not a happy bunch. So then it was time for happy hour in their snack area before heading to the game. No one wanted to talk to me. Like it was my fault the price was falling.

Since that event Yahoo has gone through a lot in the media. The CEO had twins and went on maternity leave. And the stock price bounced around. And now into mid March it is flirting with a break out, to the upside. The chart above shows a “W” bottom forming since August. Resistance above stands at 36. You can see the 50 day SMA turning up towards the 200 day SMA. When this Golden Cross happens it will be a done deal.

Momentum has already shifted higher. The RSI is rising and making a higher high with the MACD crossed up and rising. The resistance at 36 is a 38.2% retracement of the full move lower. A break to the upside would look for continuation to 61.8% to 42 as a next target. My fingers are crossed for those developers.

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