Yahoo! Chart Is Tradeable

NEW YORK ( TheStreet) -- For the most part, there is a dearth of opportunity on the long side of trading right now. After the August devastation, the well has gone dry. There are, however, a few stocks that are holding well like McDonalds ( MCD), Apple ( AAPL), Pricesmart ( PSMT), etc.

These are stocks with nice balance sheets and income statements, whose management continues to perform in a difficult period. Then there are stocks whose management has basically failed to deliver and who are rumored for takeovers. Yahoo! ( YHOO) fits that bill. See the daily chart below.

This is not a stock chart that I would choose to invest in, but for a trader, it is definitely one that can be traded. Even after the big price jump yesterday, support is nearby while resistance looms at two zones up above.

The reward -to-risk is favorable and if you can purchase at or in the support zone, you don't have to risk a lot on the trade.

I would place my stop below yesterday's lows and shoot for the higher of the two resistance zones. As long as rumors float, this stock could levitate as well and a push to $14 is quite achievable.

Until next time, just keep trading the charts.

At the time of publication, Little had no position in YHOO, but had long positions in MCD, AAPL and PSMT. can change at any time.

L.A. Little, author, professional trader and money manager, writes daily on his own educational Web site for traders and investors. He has been featured in numerous publications and is the author of Trade Like the Little Guy. His new book, Trend Qualification and Trading, details the principles and techniques he writes about on TheStreet. Little�s background includes degrees in philosophy, computer science, computer information systems and telecommunications. With a trading philosophy centered on capital protection first and the accumulation of consistent gains over time, Little espouses a simple technical approach to trading the markets that is a throwback to the days of past. With a focus on swing points and trend qualification, he provides a breath of fresh air to an otherwise crowded room of derivative indicators with an emphasis on technical minutiae.