Running the Combinations on Yelp

While many people argued that expectations were low for Twitter (TWTR) last night, I disagreed. I believe the low expectations have been saved for Yelp (YELP). Unlike Twitter, Yelp is getting beat down another 5% today. The stock is 45% off the highs this year already. Granted, it did have a strong run from January to March, but a nearly 50% retracement may have some people looking here. Earnings would provide a perfect excuse for a short-term pop before a resumed downward trend.

Options are pricing in a move around 13.5%, and I have to imagine the 9% short interest is frothing at the mouth wanting to see that open gap from last August filled here to $42.50. There is support at $47.50, which I see as a level likely to hold if tested. On the upside, I see targets of $64 and possibly $67. I actually like an upside play on the stock here....305 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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