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Berger: Why I'm shorting Yahoo
Disappointing earnings reports from major internet stocks have created an environment ideal for shorting large-cap companies like Yahoo. Serge Berger, known as the Steady Trader, outlines his reasoning behind shorting Yahoo in the short-term while keeping an eye on long-term growth from the stock.
Hitting a multi-year resistance point at USD 42 Yahoo’s growth has been stagnant. A recent hacking scandal the hit the company last week, coupled with lower than anticipated Q4 revenue have created a downward trend for the company’s stock.
Facebook was one of few internet stocks to beat analysts’ Q4 expectations, surpassing estimates by USD 255 million. The company’s growing advertising business drove Q4 revenue to USD 2.585 billion from 1.585 billion last year, making it the outperformer among other internet companies.
In the lng-term, large-cap internet companies like Yahoo are expected to rebound in six to twelve months according to Serge. For the moment though, Yahoo is trading below its 100 day moving average and this downward resistance is expected to continue.
Serge is looking to short the stock at USD 36 with a stop at USD 37.5. His target is set at the 200 day moving average price of USD32.
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01:07 minutes
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