Decision Time for Yahoo YHOO Shares into New Highs

With the break to new recovery highs today in Yahoo (YHOO) shares after a stellar recovery, we focus our attention on the “will it or won’t it” continue the breakout or else pull-back once again with a trap.

Let’s take a look at the Daily Chart “Make or Break” key level and put this in the context of the broader picture:

The key focal point for traders is the current $29.50 to $30.00 per share level which reflects the July breakout highs and the current breakout – and reversal candle today – above then beneath the easy-reference $30.00 breakout level.

Just like July, we saw a sharp spike higher, only to see price return quickly toward the $27.00 polarity or lower support trendline.

We’ll be using IF/THEN planning with respect to this level.

A breakout and sustained movement up away from $30.00 per share “should” lead to additional tradable, pro-trend upside action in the context of the Weekly Chart (below).

Otherwise, if we see another return under $30.00 – a bull trap – then we may be anticipating or trading a movement back to the $27.00 per share confluence (this is best seen on the Daily Chart above).

Here’s the broader Weekly Chart Pro-Trend Structure:

After a multi-year compression or consolidation pattern (yellow highlight), shares broke powerfully above the $16.50 and $17.00 per share level on higher buy-volume and upside momentum.

The breakout – and new bullish uptrend – continues to this day where we encounter the current “make or break” price level into $30.00 per share.

Yahoo’s (YHOO) share price has doubled from the $15.00 per share Midpoint Value Area or central price of the compression pattern.

Whether you’re trading Yahoo shares or just following along for a “walk forward” real-time educational example of how to plan for a “breakout or trap” situation, continue following the short-term activity relative to the current $30.00 per share focal level.

Join fellow members to receive daily commentary and detailed analysis each evening by joining our membership services for daily or weekly commentary, education (free education section), and timely analysis.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).