Wednesday, December 03, 2008

Yahoo - My Response To One Of My Readers

The other day one of my readers sent me an email asking my opinion on the bullish MACD divergence that is taking place in yahoo right now. I don't usually like to trade using just one indicator because in my experience trading in such a way has not been profitable. I prefer to trade only when several of my favorite tools and indicators confirm the trade.

In the above chart there is a bullish divergence in yahoo but other than that I don't see any other reason to buy this stock. The only thing I would suggest if you are thinking about buying this stock is to at least wait for the trendline to be broken which means I would like to see one or two closes above the trendline. If that were to happen that might increase the odds of this trade working out on the long side but in my opinion I wouldn't bother trading this stock at all. There are better trades out there...just be patient.

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