To: t2 who wrote (25728 ) 7/8/1999 4:38:00 PM From: Sir Francis Drake Respond to
<OT> t2K - YHOO ran up pre-earnings, and it ran up because a lot of mo-mo boys jumped on the bandwagon, looking for the old pattern to repeat. However, as we discussed, the pattern was modified, precisely *because* everyone knew what's up. So, it sold off a bit before, and didn't sell of badly after. This puts YHOO at an interesting inflection point. It is not "cheap" compared to where it was before the earnings. The question is, will YHOO hold on to the recent gains, and move forward, or will it retreat on the theory "no more good news for a while". The answer is where you put you finger on: the overall net market. Before, the movement of YHOO was driven by earnings expectations, with the mo-mo crowd jumping in, and pushing up the price - and so, YHOO was *relatively* less sensitive to the overall sector. Now the situation is different. There is nothing immediately to look forward to, like earnings. That could be a temptation to say: sell, and put the money into another stock where it can be run up toward earnigs etc., in other words, the mo-mo crowd sees little reason to stay in. If the market sells off, YHOO has no independent strength to fight it. If the market remains strong, you should see the more "long-term" folks come in, people who liked what they saw in the earnings, and are not looking for an immediate mo-mo type move. That could push YHOO up moderately, but frankly I don't see it as outperforming other nets on a relative basis in a positive market. As a *day*trade YHOO is not bad, especially that it has the liquidity, but you have to calculate if this is the best use of your capital at the moment. Of course, if you habitually trade YHOO and are intimately familiar with its trading patterns, you can always make money, regardless.
