The bulls are yelping about $YELP – June 8, 2021


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Let’s look at Yelp ( NYSE: YELP ) today. I put this stock on our Active Trade List a couple of bucks ago and I just want to explain why. I like the fact that this stock was trading in a fairly tight volatility squeeze. Not super tight, I measure these by the Bollinger Bands, they just need to be narrow.

I like the fact that the stock was resting right on the 50-day moving average, which was flat. A flat 50-day moving average means unless it’s some kind of a twist of mathematical logic, a 50-day moving average that is flat means that the stock has been trading sideways for quite some time.

A flat 50-day moving average kind of takes care of a lot of the logic or of the mental analysis that you would need to do to figure out if this is a good trade. When I see a stock that is squeezing near the 50-day moving average that really gets my attention. That’s all, I don’t just say, buy it, but it really gets my attention.

Here I’ve got the 100-day moving average where it has just been kind of sandwiched between the 100 and the 50. And so I was looking at this stock yesterday, I set my alert at $40.00, which it triggered this morning. And lo and behold, the stock was strong all day. I don’t think it’s too late to buy this stock. We’ve got heavy volume for Yelp ( NYSE: YELP ), much heavier than average.

The thing with these volatility squeezes is, they explode. Like they just explode right off the bat, boom. Once they get going they really run. And so as I look at this stock you can laugh and say, well, that that’s not much. I look at $45.00 as in the bag, that’s 6.5 percent. It doesn’t seem like a lot but we don’t know.

I could say, oh, well it’s going to get to 50.00 or it’s going to get to, I don’t know, you don’t know. Nobody knows except the liars and the fools. All I’m doing is looking here and saying, you know what? I think this has another 2, 3, 4 days in it.

Don’t expect this just to run up in a straight line. It would be nice if it did, but a lot of times on these types of things you will see something that pulls back like this and then maybe runs up. So don’t expect this just to go in a straight line, but I think today’s breakout above 40.00 was a really important development.

When so many stocks are really kind of choppy now, this one, to me, looks pretty clear. And I say that acknowledging that when something looks really clear in the market you are probably seeing it exactly wrong. But here I see this breakout and I think it can continue.

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