Web giant Yahoo! (YHOO) has had a tumultuous run over the last year and change, but distill the $27 billion digital media company's price action just to 2013, and this stock has been in an orderly uptrend along side the broad market. Year-to-date, shares of YHOO have climbed around 22%. But it shouldn't come was a huge surprise that when the uptrend broke in the S&P, it fell even harder in Yahoo! last week.
It doesn't take an expert technical analyst to figure out what's going on in YHOO -- a glance at this stock's chart will do. YHOO's trendline support level acted as a springboard for shares all the way up, but once it gave out in last week's trading, it sparked a major selloff in shares. At this point, it's unclear where the selling in YHOO will end, but I'd stay away from the long-side until the new downtrend resistance line gets taken out.Momentum, measured by 14-day RSI, adds some extra evidence to Yahoo's change-in-trend. RSI had been bouncing above 50 when shares were in bull market mode, but the momentum gauge broke down below that level last week. Since momentum is a leading indicator of price, that points to lower ground in YHOO.
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