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Yahoo! Inc.- Numbers Behind the News 
Monday, April 28, 2008
By Jay Pasch
Shares of Yahoo! traded lower on Friday, down 50 cents or -1.8% closing at $26.80 as investors' confidence wanes over closing the merger deal with Microsoft. Seeking clarity in the fog that spans the great poker table between potential merger partners, Microsoft and Yahoo!, we took a look at last week's price-action as it continues to hover over the 200-period moving average by asking...
Q: How has YHOO performed in the past as price continues to hold over the 200-period moving average with a 'trend day' decline that closes below the lower Bollinger band?
A: According to the 14 previous occurrences of this event, YHOO has shown a strong bullish edge that peaks 9 trading days after the event. YHOO rallies in 93% of the cases (13 of 14) by an average of 8.8% relative to the close on the event date. The 1 decline is -1.8%. The overall return of the 14 cases is 8.0%, providing a target price of $28.94 by Thursday, May 8 2008.
While it is generally outside the context of our charter to comment on the non-empirical, we do assert that it is in the best interest of both Microsoft and Yahoo! to shake confirming-hands across the table before Google gets farther out the door with the casino's jackpot.
Mr. Jay Pasch3 is a private futures and equities trader based in Minnesota. He may hold positions in the instruments mentioned in his trading ideas.
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Let variable values:
@ = GII.YHOO.NASDAQ
theEvent = IF
1 value ago {{
(@ - Low of @) is less than (0.2 * (High of @ - Low of @))
AND
(High of @ - Open of @) is less than (0.2 *
(High of @ - Low of @)) }}
AND
1 value ago {
@ is less than bollinger_low ( @, 20 units, 2 ) }
AND
1 value ago {
@ is more than 200 value average of @ }
THEN 1
ENDIF
Date Day t+9 t+34 t+35 t+39 t+40 Drawdown%
03/14/1997 Fri 13.1 38.6 42.6 33.7 29.7 -12.9
10/28/1997 Tue 12.8 39.9 38.1 51.0 49.6 -9.0
01/29/1998 Thu 5.2 35.6 34.4 43.7 46.5 -1.0
05/27/1998 Wed 2.4 57.9 62.2 68.3 64.5 -13.9
08/04/1998 Tue 8.1 20.6 38.5 54.5 52.1 -7.2
09/01/1998 Tue 16.8 59.9 65.7 71.3 75.4 -1.3
05/25/1999 Tue 12.9 25.6 21.7 19.6 14.3 -5.1
08/08/2003 Fri 13.2 21.0 24.8 35.3 37.2 -3.1
11/19/2003 Wed 8.2 22.5 26.7 22.5 21.4 -1.6
02/25/2004 Wed 0.0 26.2 24.4 25.9 32.9 -2.7
08/06/2004 Fri 8.0 25.2 22.3 34.6 34.2 -1.9
01/07/2005 Fri -1.8 -10.3 -10.2 -8.0 -7.8 -3.2
01/25/2005 Tue 1.3 -6.2 -7.2 -9.0 -9.3 0.2
03/17/2008 Mon 11.9 NaN NaN NaN NaN 1.5
04/25/2008 Fri NaN NaN NaN NaN NaN NaN
Avg 8.0 27.4 29.5 34.1 33.9 -4.4
AvgPos 8.8 33.9 36.5 41.9 41.6 0.9
AvgNeg -1.8 -8.2 -8.7 -8.5 -8.5 -5.2
PctPos 92.9 84.6 84.6 84.6 84.6 14.3
PctNeg 7.1 15.4 15.4 15.4 15.4 85.7
Maximum 16.8 59.9 65.7 71.3 75.4 1.5
Minimum -1.8 -10.3 -10.2 -9.0 -9.3 -13.9
StdDev 5.8 20.4 22.0 24.8 25.1 4.7
ZStat 1.4 1.3 1.3 1.4 1.3 -0.9
Variance 33.6 416.4 485.3 615.2 630.9 22.2
15 Occurrences |
Comments:
Web Address of this trading idea:
Links:
2 http://www.markethistory.com/content/analog/analog.html?ticker=YHOO
3 http://www.markethistory.com/staff/detail.html?s=pasch