Putting aside the possibility mentioned here yesterday that Yahoo has made its bull-market top, we’ll focus solely and mechanically on technical signs to determine how to trade the stock. They are bullish at the moment, following yesterday’s nasty short-squeeze from a deftly engineered low in the opening hour. Specifically, I’ll recommend buying 400 shares if the tentative pattern shown develops into a tradable a-b-c. This should be done camo-style, using a chart of perhaps 5-minute degree, with a goal of limiting theoretical entry risk to no more than 7-9 cents per share. Partial profits should be taken on 3/4 of the initial position by the time the ‘D’ target of the small pattern is reached. ______ UPDATE (October 11, 11:00 a.m. EDT): The rally pattern played out precisely as drawn, with a gap-up finishing stroke this morning to 34.37, a nickel from the 34.42 target. As a practical matter, longs could not have been initiated at the 33.27 entry-trigger, since it was bypassed by Thursday’s gap-up opening. The next chance would have been via camouflage, after the stock speared the 33.65 midpoint pivot. But even then, there were no ‘easy’ entry points. _______ UPDATE (October 14, 10:21 p.m. EDT): YHOO has labored for four days without generating a bullish impulse leg on the hourly chart, so caution is warranted even if the stock does not yet beg to be shorted. _______ UPDATE (October 17, 9:17 a.m. EDT): YHOO’s gap this morning beneath the midpoint support shown implies it will continue lower, to at least 31.66. That Hidden Pivot can and should be bottom-fished, but until then the stock is a short. ______ UPDATE (October 21): Yahoo’s intraday charts have turned bullish, but only after a stretch of tedium that has sapped my interest in the stock. I still think that mountainous faith in Marissa Mayer’s stewardship is misplaced, that it will be shattered, and that the stock may already have made its bull-market top at 35.10.
