My Take on Yahoo!
By
Bryan Bottarelli
With Yahoo! Inc. (YHOO:NASDAQ) trading up $2 today (good for a 7.53% move), I’d like to take a moment to give you my take.
In short, the stock now has the ability to run from its current price of $28.98 all the way up to $32. The reason for this forecast is simple…
In mid-July of 2006, YHOO stock experienced a severe gap down. On that day, shares fell from $32 all the way down to $25, then on their way to hitting the $23 level by late October. All told, the stock lost $9 from July of 2006 to October of 2006, a four-month fall of almost 29%.
Now here’s what’s important…
In the midst of this down move, YHOO has left itself an “unfilled” gap between the $32 and $27 levels. And if I learned one thing on the floor of the CBOE, it’s that all gaps eventually get filled. And guess what? Don’t look now, but YHOO is in the process of filling said gap!
As I write, YHOO is trading up $2 on news from Terry Semel, Yahoo! chief executive who said that YHOO would roll out the key piece of its new ad technology next month.
If these new features work, Yahoo! expects more revenue per Internet search -- a business segment in which its trailed Google Inc. (GOOG:NASDAQ).
In fact, this one segment is why Google’s revenue is growing about six times faster than YHOO’s. Look out Google: Yahoo! is getting its act together.
And even if it comes up short in the near term, I’d expect the stock to reclaim the $32 level sooner rather than later.