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For those who have been following Yahoo (YHOO) Stock, we’ve seen an acceleration in price that has taken the form of a “Rounded Arc” up.  Let’s see it on the daily chart.

If you pull the timeframe back, you’ll see a large downmove from a 2006 high just above $40 per share to the November 2008 lows of $9.

Price has almost doubled off the November lows, peaking so far at $17 per share.

Take a close look at the positive momentum divergence (highlighted) that preceded the price reversal back up.

We’ve now formed a clear arc (on both the upper and lower trendlines - I’m just showing the lower lines) in price to the upside, as price as cleared both the 20 and 50 day EMAs as resistance (both on the daily and weekly chart).

The EMA orientation is bullish on the daily chart and expected support could come in at $15.50 or $15.00 (via the EMAs).

I always like showing you arc patterns on the chart because I find them so interesting.  You can almost ‘feel’ price ascending the channel drawn for it.

One thing to notice is that the angle is getting steeper, which can only continue for so long - price cannot go up indefinitely.  Generally the steeper the angle up, the greater the drop will be when it comes… but we’re probably not there yet in Yahoo.

Take it for what it’s worth - an interesting pattern that shows the pathway of price in a tight, rising range.

Corey Rosenbloom, CMT
Afraid to Trade.com