BUY, SELL, HOLD (2)

Yelp (YELP) Bulls Look to Profit Off Google's Legal Issues

Google Inc's (GOOGL) downfall could be Yelp Inc's (YELP) gain

Digital Content Group
Apr 15, 2015 at 11:16 AM
facebook X logo linkedin


Yelp Inc (NYSE:YELP) is gaining today, after BofA-Merrill Lynch noted the stock could possibly benefit from Google Inc's (NASDAQ:GOOGL) legal woes. In the options pits, bullish betting has picked up, with calls crossing at five times what's normally seen at this point in the day. In fact, nine of YELP's 10 most active contracts are calls.

Today's bulls are eying short-term profits, with the April 48, 49, and 50 calls all seeing possible buy-to-open activity. Speculators are hoping for extended gains above these strikes by the close this Friday, when front-month options cease trading.

YELP isn't used to this positive attention. For instance, during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity has amassed a put/call volume ratio of 1.00 -- higher than 89% of all readings from the past year. In short, put buying has been more popular than normal of late, compared to call buying.

Also, many traders are selling the stock short, as short interest represents almost 24% of YELP's float. Elsewhere, some analysts are unsure of the shares, with nine brokerage firms maintaining "hold" or worse opinions -- though the equity still sports 18 "buy" or better recommendations.

Yelp Inc (NYSE:YELP) has earned this onslaught of pessimism by lagging behind the S&P 500 Index (SPX) by nearly 11 percentage points during the past three months. Now, the shares are running into their 20-week moving average, which thwarted their last two breakout attempts. Should YELP resume its longer-term downtrend, a round of downgrades could exacerbate selling pressure.

Weekly Chart of YELP since August 2014 with 20-Week Moving Average
 

Two High-Octane Trade Ideas. One Simple Goal: Intraday Profits.

Dynamite Day Trading Signals delivers two same-day options trades every week — powered by proprietary intraday analysis and 43+ years of trading expertise.

But this isn’t just another stream of alerts.

It’s a structured plan with clear entry and exit points – designed for traders who want to act fast, trade smart, and wrap up gains before the closing bell.

No guesswork. No overnight exposure – Just two well-researched setups per week — whether you prefer buying premium or selling it.

And the results speak for themselves: subscribers have locked in +245.8% total profit over the last six months (since inception!).

👉 Start your one-month trial now for just $10, and be ready for the next trade alert.