I originally bought Yahoo last May at $21. I sold it in August at $38, when I got out of the market because of the Far East. I was lucky to buy it all back at $41 during the October crash, and sold it at $58 in early December, thinking it had become too expensive and the rest of my portfolio was going down for that final early-December leg of the correction. I bought it all back again in late January at $60, and (tired of relying luck to get barely whole again) have decided not to trade it except if I think we're in for an intermediate decline.
I'd consider selling or hedging Yahoo if it looked to me to be wildly extended (like 2x its 50-day average...currently 78), or if long term interest rates backed up past, say, 6 3/4%. Otherwise, pending a change in fundamentals, it's just put away. I think it's a wonderful, rare opportunity, even at $114. I was encouraging some friends to buy at least some as late as Friday.
My wife bought Yahoo for herself at $21 last May and has kept it all along, but sold some calls against it last Fall. I can't remember exactly how she did with them...I think she lost a couple points. She's been showing me up...she's probably lost two points of opportunity, and I've lost five.
I'm guessing Yahoo's management has decided against a split for now, just to dampen exuberance. I think Yahoo needs to catch its breath and consolidate its advance. This leg has been a double. Triples are rare, though Yahoo's leg last summer was nearly so.
Technically, on a log chart, there's a long term trend channel with the support way down at at 64 and resistance at 125 or so. |
