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Thursday, May 03, 2012

YELP - Targets

YELP had earnings last night.  It appeared to be a non-event as per the after hours trading, but this morning's head fake really took down YELP by surprise. Currently it bounced off 20.30, after an astounding 14.3% intraday swing.   Let's take a look at the price patterns:

The first blue rectangle at the beginning of April established the target for the 2nd blue rectangle.  It turned out that exactly 76.40% of the target was reached -- see the first purple rectangle.  By the same token, based on the first purple rectangle, we can establish the second pruple rectangle as full target.  Now we see some mathematical confluence here:  assuming once again, only 76.40% of the target will be reached (see white arrow), then the next "up-leg" could bounce from 18.21 which just happen to be the full target as per the second blue rectangle (18.27 to be exact).  Quite amazing!  Of course, there's still the all time low of 19.36 to act as support.

All these are just chart magic. Let's hope that the current bounce from 50% of the target holds, lest Dr. Fly, who's currently amassed shares of YELP for over 30% of his portfolio, would likely take loss and erase a big chunk of his 17% YTD realized gain.

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