Taking a Shot
January 17th, 2006 by BWV
Today I plan to go against my usual strategy of avoiding stocks as they announce earnings.
The Internet search advertising space has be so hot.. I think the prospect of a downside surprise in Yahoo’s earnings is a low probability event.
More importantly, the stock has sold off sharply in the last week.. so it’s hard to make the case that expectations are really high. The chart setup suggests an upside move almost regardless of what YHOO says in their earnings report after the bell today.
I sold out at $43.20 early last week during that gap up rally.. which was based on an announcement of some kind of wireless initiative for both GOOG and YHOO. It seemed like an odd reason for a big move, and the R/R for a long up there was pretty weak.
I added back 1/2 a position on Friday at $40.16 and am sitting tight.
Long YHOO
ouch. down 13%.. on a small position thankfully. no wonder pre-earnings plays are not my game!
my stop is now 34.69.. just under this morning’s low.