Category Publishing

$AOL . Bearish setup forming

This is a short that is worth looking into.

Unlike the market index like $SPX or /ES, AOL chart has show :

1. The price has not went up further. And it is now below the Tenkan sen

2. The Tenkan sen is turning down (whereas /ES is still exhibiting parabolic movement)

3. The gap between Tenkan sen and Kijun sen is narrowing. This suggest a possibility that a Bearish cross may be forming.

4. Gap support is around $17.17

5. The kumo support is thin towards the first week of March period.

Given the support below and a possible price target of $15 and $12, I will be looking for a SHORT CALL SPREAD.

AOL Inc. (AOL) : Thinking Out Loud

- Will be listed today
- zero debt
- current CEO is ex-GOOG, in charge of ads (how much will that change in terms of strategy?)

Revenue Source
- dial-up subscribers,
- ads revenue
- content licensing

Competitors
- YHOO, GOOG, MSFT etc

Risk
- falling ads revenue for the possible next quarters (may report its first quarter with increased revenue due to holiday season)
- primarily a US play, how are they going to attract audience beyond the shores of US or increase its share?

Opportunity
- publishing industry going through restructuring
- opportunity to hire talents and seek new shores
- most likely will put together a plan to grow revenue from mobile devices
- possible partnership or acquisition with Garmin (mapping is an important play on many companies now, AOL also owns maps)

What else?

Yahoo! Inc. (YHOO) : Bullish Cross With Breakthrough above the Ichimoku’s kumo

Yahoo has a gap up on Sept 10 and since then it has exhibited bullish signals

  • Tenkan sen has cut Kijun sen
  • Price has rise sharply and has pierce through the kumo resistance on the Daily Chart

At this moment, it is challenging its previous high back in July at around $17.59 . Incindently, this is also the last support level when the financial crisis took a dive.

2009Sep-Yahoo! Inc-800x600

On the Weekly Chart, we can see that Yahoo is inside the kumo; a trendless state.

2009Sep-Yahoo! Inc-800x600_Weekly

With the last quarter of 2009 coming up, lots of retailers and brand names will have to start allocating their marketing budget for the final burst. Yahoo has a good relationship with various ads agency and I think we will see some action on this front.

Update: Additional Notes
Over the next 2-3 years, I doubt there will a lot of interesting development for Yahoo, unless they start selling assets.

The only forward looking piece that I am looking at is their partnership with Samsung on the HDTV front. (and we do not know what kind of timeframe is needed to make this a success)

Here’s my thoughts on ads revenue:
- major bulk of ads revenue is still derived from brand names
- TV revenue still accounts for major bulk of marketing allocation compared to online ads

Given the above, it is safe to assume that Yahoo wants to continue building their ‘inventory’ of ads spaces.

Tie up with Samsung is a move to capture the revenue on the TV side