Shares of Yahoo! traded lower on Friday, down 50¢ 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 nine 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 one 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.
To view this event in EventEdge, click HYPERLINK "http://www.markethistory.com/content/events/futures/chart.html?ticker=NYM.HO&events=month,DownL0,LapDay1,LapDay0" here .
Mr. Jay Pasch is a private futures and equities trader based in Minnesota. He may hold positions in the instruments mentioned in his trading ideas.
