Jerry Yang’s Yahoo! No More

Perhaps the most brutal assessment of the exit of Jerry Yang, who resigned from “all positions” at Yahoo! (NASDAQ: YHOO)on Tuesday, was that of Dennis Gartman who opined “there just aren’t that many people who have destroyed that much money with one decision.

Gartman was referring to the $45 billion offered for Yahoo! by then-suitor Microsoft (NASDAQ: MSFT). Allegedly a major obstacle to the deal, then-CEO Jerry Yang announced on Tuesday that he was leaving the company he helped found to “pursue other interests.”

For short-term traders, however, the departure of Jerry Yang could prove immediately rewarding. Shares of Yahoo! have been trading largely sideways after pulling back to short-term lows two weeks ago. And with Yahoo! up more than 5% in afterhours trading Tuesday evening, the likelihood is growing that traders and active investors who picked up shares of the stock when it was on sale near the beginning of the month will be able to sell positions into strength in the next few days.

What signs were available for traders who bought shares of Yahoo during its pullback? In addition to finishing lower for three and then four days in a row, trading to the outskirts of oversold territory above the 200-day moving average, shares of YHOO earned ratings upgrades to 7 out of 10. Although not in our “consider buying” range of 8, 9 or 10, the upgrade to 7 represented the highest rating in the stock in a month.

The Yahoo! news comes on after a day that was relatively kind to Internet stocks. Shares of Google (NASDAQ: GOOG) finished up more than half a percent. Baidu Inc., (NYSE: BIDU), which has been trading in bear market territory since mid-November, bounced higher by more than 1% to finish higher for four out of the past five trading days. And up more than 5% and gaining for three out of four sessions were shares of Chinese Internet social media networker, Renren Inc. (NASDAQ: RENN).

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David Penn is Editor in Chief of