Daily Stock Market Equity and Options Trading Commentary

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Thursday, April 16, 2009

Google Earnings on Deck What Could a Blockbuster Report Mean for Yahoo!

Google is scheduled to report earnings after the bell today with a consensus estimate of $4.93 per share. Analysts have revised these numbers down a lot and with Google fetching $5.10 a share last quarter they could easily beat the high estimate of $5.30 a share. If Google has a blockbuster report which is possible (Analysts revising price targets and earnings recently! Very bullish signal), this could take Yahoo with it above 15 a share in tomorrow's trading session (assuming it doesn't get above that today). I think that Google could easily fetch over $5 a share considering the amount of time spent on the Internet has increased substantially in the past quarter (cold outside for much of the United States= less to do outside, and recession= people cutting costs and entertaining themselves at home cheaply such as browsing the web). I honestly think Google could report better than expected earnings and assuming they get above 400 a share they could easily get to 440, then next resistance points are: around 460, 485 and then even 515! If Google misses earnings they could test support at 335 and then 285. Watch Yahoo, with Yahoo! talking with Microsoft and if Google beats earnings we could see Yahoo over 15 a share easily by April options expiration (tomorrow)! As of now the options market is factoring in a 40% chance Google reaches 400+ by tomorrow- not as convincing as I'd like to see it but we'll see what earnings brings us.

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