YHOO INTRADAY TRADING UPDATE - Friday, June 18
At the request of some of my friends on this thread, I'll periodically start posting "intraday trading updates" on YHOO. For a (complementary) technical analysis on the stock's daily chart, I highly recommend taking a look at the T.A. references which are posted here periodically by "The Intelligent Speculator" - always some great work! I'll focus more on how the stock traded intraday relative to the broader market and to YHOO"s daily chart, my analysis/observations on intraday price action, key support and resistance levels, and things to watch for going forward.
Ripu, Your analysis of the YHOO option expiration was right on the mark... they held it down under $145 most of the day, then let it rally a bit into the close, pinning it to the $145 strike (within half a point) at the close... which, studying the open interest tables below, is probably the optimum expiration closing price for those holding the net "unhedged" contracts at the CBOE, who can afford to move the stock... heck, sometimes they probably even make a profit on buying/selling the stock to manipulate it (er- excuse me - control it) into expiration. Even if they lose money pushing the stock around, it'd be a lot LESS than they'd lose by letting too many contracts expire "in the money". Less expensive to push stocks around by a few $ (vs. $5 or $10), so there are tradeoffs...
Related, EBAY made a strong "breakout move" towards the $150 strike in the final half hour (after the Bonds closed), but a strong wave of selling smacked it back down hard to close just above $145... it would be interesting to see the same "open interest" table for EBAY's CBOE puts and calls. Probably a lot of open call interest at $145.
The nets seem to want to rally - I'm looking for YHOO back into the $150's next week. However, Jeff Cooper (an outstanding stock trader) is saying that the nets could be getting tired from the rally up off the lows, and setting up to come in again... so be careful out there! I'm more optimistic myself, thinking we have completed the big summer "net correction" with interest rate ballyhoo and "nets may crash fear campaign" out of the way. As indicated yesterday, I attribute the weakness in the past 24 hrs to option expiration per above, and am looking for real followthrough on the reversal up (e.g. off of $120 in YHOO), but the nets do need to show that they can rally for more than 2-3 days at a time to confirm...
Have a good weekend, and thanks to many on the thread for the friendly PM's. -Steve |
