It's not the kind of stock you'd want to get married to here, but you might want to date You On Demand Holdings, Inc. (NASDAQ:YOD) for the next few days. Shares of YOD broke above a major resistance line on Friday, and put some distance between themselves and that line today. It's a clue that the bulls have overpowered the bears, and now that the ball is rolling, it should keep rolling for a while.
For those not familiar with it, You On Demand Holdings is essentially the Netflix (NASDAQ:NFLX) of China.... with a splash of YouTube thrown into the mix. Business withered away to practically nothing a year ago (a long story not worth getting into just yet), but through a series of new partnership and new investments over the past six months or so, there's finally a light at the end of the tunnel for the company. Ditto for YOD stock. In fact, the stock is the core of the story here.
After peaking at $7.35 in February, YOD began a prolonged and sizeable selloff, dragging shares all the way down to a low of $1.61 hit four weeks ago. That low looks like it ended up becoming a bottom, though. In the meantime, You On Demand Holdings have moved above a major resistance line (dashed) that had up until this point been pushing the stock persistently lower.
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Truth be told, it's still not an ideal breakout move. YOD needs to hurdle the 100-day moving average line at $2.26 (gray) to really get past the proverbial point of no return. But, given all the bullish progress we've seen up until this point, the bulk of the heavy lifting has been done.
So why isn't this a long-term call? Because You On Demand Holdings, Inc. will announce last quarter's results next Thursday, the 13th. That unveiling may be a reality check the bulls don't want to face, although the risk doesn't seem to be fazing any of the bulls right now.
Were it not the mere announcement of the earnings date, it might be worth the risk of hanging onto VOD through the news. Take a closer look at the company's recent press releases though. It was this morning's announcement of the earnings release date that sparked the rally, suggesting somebody out there knows something about what's in store.... or at least thinks they know something. Problem is, stocks that get bought on the rumor do tend to get sold on the news.
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