Below Support- Yahoo!

Published on Tuesday, 24 August 2010 05:48 Written by Christian Paolinetti

New York, August 24th (TradersHuddle.com) - Shares of Yahoo! Inc. (NASDAQ:YHOO) closed the trading session at $13.65 below calculated support at $13.68 breaking the stock technically, raising concerns by investors, as the move might trigger more selling.

Yahoo! Inc. 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's stock was trading in a well defined range with support at $13.68 and resistance at $14.52; given that this range was broken traders will be closely monitoring the stock?s price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that Yahoo's stock is still near the broken support, traders will be focusing on $13.68 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in Yahoo! can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $13.68. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position.