This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Riding Yahoo! to Its Peak

This column was originally published on RealMoney on Nov. 18 at 8:25 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

A good way to end the week is to take one trade -- one just highlighted Wednesday, by the way, as a long pick in my newsletter -- and answer R.P.'s specific questions below.

Gary, you really helped improve my investing approach. I've got a question regarding Yahoo! (YHOO - Get Report).

Looking at a weekly chart, YHOO closed at 39 on 12/3/04. If YHOO manages to close above 39 this week, how long can we go?

Do I have to worry about resistance from back in 1999-2000? (I don't have chart data from back then.)

Thanks for all the great advice!


R.P.

OK, let's start with the chart, and there you can plainly see Yahoo! indeed breaking above $39. Couple that with the high volume and you can see why I listed it as a newsletter long.

As for how high it can go, one simple rule is that breakouts often repeat the "peak-to-trough" move they made in the prior congestion. For Yahoo!, that move was roughly $30 to $39. Add that 8 points to the $39 breakout number and Yahoo! should run to at least $48.

Finally, do you have to worry about resistance from six years ago? The answer always lies in the time frame in which you're trading. As a guideline, if you're in and out of trades in a few weeks, then a six-month look back is appropriate. (That's what I use for my trading.) If your time frame is in months, then I'd look back about six years. Any longer than that, and you probably use fundies vs. TA anyway, so I'm not sure it matters!

Today, the Dow Jones Industrials, Sears Holdings (SHLD - Get Report), Time Warner (TWX - Get Report), Quidel (QDEL - Get Report), Motorola (MOT), International Paper (IP - Get Report) and Sierra Wireless (SWIR - Get Report).















Charts produced by TC2000, which is a registered trademark of Worden Brothers Inc.


And that is the final word from Tony's Exxon, where I'm not sure it can be any more predictable: When the noise level about gas prices was the highest, the price at the pump started falling. Remember the $5/gallon hysteria? The average price yesterday was $2.26. Next up on things you won't hear about in a few months: Avian Flu.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Quidel and Sierra Wireless to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

P.S. from TheStreet.com Editor-in-Chief, Dave Morrow:
It's always been my opinion that it pays to have more -- not fewer -- expert market views and analyses when you're making investing or trading decisions. That's why I recommend you take advantage of our free trial offer to TheStreet.com RealMoney premium Web site, where you'll get in-depth commentary and money-making strategies from over 50 Wall Street pros, including Jim Cramer. Take my advice -- try it now.

Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes a daily technical analysis column for RealMoney.com and also produces a daily premium product for TheStreet.com called The Chartman's Top Stocks -- click here for a free two-week trial. While Gary cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
IP $53.10 0.00%
QDEL $21.84 -3.92%
SHLD $40.77 -1.69%
TWX $85.20 0.06%
SWIR $31.56 -0.54%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs