I am really wondering if there are any stock traders out there trading Yahoo stock (NASDAQ:YHOO)! By now we have all heard of yesterday’s earnings report of Yahoo Inc. and the hiring of Google’s executive, Marissa Mayer, as its new CEO. However that news brought neither the volatility nor the liquidity as presented in the daily stock graph. Volume didn’t peak in the stock market and shares continued exchanging hands for $15.60 a share. Yahoo stock price has been unable to break out either above $18 or below $11 since 2008, consolidating inside that range after a 2-year downtrend falling from $40. I don’t consider Yahoo stock a great day trading stock but I have been wrong before.
Perhaps for some stock traders buying the lows and selling the highs of Yahoo’s ranging market might have led to profitable trading. For instance, a stock trader could have made money if they bought YHOO shares at $14.60 and sold at $16.20. Those are the most recent support and resistance key levels found at the daily graph. Guess how many trades they had the opportunity to complete the past 6 months. 1! One! Just one trade. And they didn’t have to wait for breaking stock news like the earnings report or hiring rival’s employee. The trade that signaled an entry in February, would have been completed in June. In the meantime day traders would kill for such a profit, whilst day trading during days when the stock fluctuated for a measly 0.20$!
Imagine Yahoo stock breaking out to higher than $18 prices. Now I can totally understand why Yahoo stock should be one of the most discussed stocks online according to Google Finance’s trends. Investors, position and swing traders would all provide enough juice for Yahoo shares to begin trending upwards. For the time being though no piece of news managed to attract stock traders’ attention. They just brought more readers in the financial blogs and created buzz about a stock that has been sleeping for 4 years.
On the other hand, a prolonged consolidation phase could inspire a more-than-usual long term trend in the future and astute stock traders find this situation an excellent entry point to conceal their trades and let their profits run when the crowd jumps on the wagon. Are you one of them?