Yandex NV (NASDAQ: YNDX)

Yandex N.V. operates an Internet search engine in Russia and internationally. The company offers a range of search, location-based, personalized, and mobile services that enable users to find information, and communicate and connect over the Internet from desktops and mobile devices; and localized homepages for specific geographic markets. It provides Yandex.News, a news aggregation and information service; Yandex.Market, a price comparison service that provides product information, price comparisons, and consumer-generated reviews of products and online retailers; and other search services comprising search services for images, videos, music, theatres, televisions, weather, jobs, transportation, cars, and real estate.

Please take a look at the 1-year chart of YNDX (Yandex N.V.) below with my added notations:

1-year chart of YNDX (Yandex N.V.)

YNDX has rallied nicely since its $20 low back in April. However over the last 5 months the stock has created a key level of support at $35 (green) and that $35 level is also the “neckline” support for YNDX’s H&S reversal pattern. Above the neckline you will notice the H&S pattern itself (blue).

Remember, patterns such as an H&S need to confirm to have the meaning that they imply. Confirmation of the H&S would occur if the stock were to break below its $35 support.

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The Tale of the Tape: YNDX seems to have formed a head & shoulders pattern. Although a long trade could be made at $35, the pattern implies that the stock might be preparing to break lower. A short trade could be entered on a solid move below the $35 “neckline” support.

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Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach