Yahoo! in a Well Defined Range

Published on Tuesday, 31 January 2012 08:20 Written by TradersHuddle Staff

New York, January 31st (TradersHuddle.com) - Shares of Yahoo! Inc. (NASDAQ:YHOO) closed the trading session at $15.55 near its 50 day and 200 day moving averages currently set at $15.61 and $15.22 respectively. Yahoo's price action is above the 200 day moving average but below its 50 day moving average, signaling a possible break out.

Yahoo! Inc. (NASDAQ:YHOO) is a global Internet media company that offers Internet services to users, advertisers, publishers, and developers worldwide. The company owns and operates online properties and services, and provides its advertising offerings and access to Internet users through its distribution network of third-party entities, as well as offers marketing services to advertisers and publishers. Yahoo owns the second largest internet search engine and provides email services to its users.

Yahoo! price action seems to be setting up for a tight range between the 200 day moving average as support and the 50 day moving average serving as resistance.

A tiered approach to enter the stock, appears to be the best way to maximize possible movements from the stock, as traders could enter Yahoo! with a small position and wait for the stock to break out above the 50 day moving average at $15.61, where traders could add to their position as momentum builds with the breakout. The flip side will be if support being referenced at the 200 day moving average set at $15.22 breaks it could mean further downside in the horizon for Yahoo! .