Is Yahoo! a strong buy?

Standard & Poor's issued a strong buy for Yahoo! (Ticker: YHOO) recently. They believe Yahoo's revenue will increase 7% in 2010 and 2011 respectively and they also see the joint venture between Yahoo! and Miscrosoft is a good sign. Is YHOO a strong buy?

Fundamentally, analysts expect Yahoo! to make good earnings in the next couple of years. Here is the earnings estimates:

If the current economy is recovered healthily, Yahoo!'s earnings trend looks promising!

Technically, Yahoo! is in a mid-term downtrend. However, in short term, there is a well formed bottom as indicated by the green arrow in the following figure (Weekly chart of YHOO). The bottom is confirmed by the last week's rally. In short term, it's extremely important to observe whether the blue downtrend resistant line will be broken through. If it's broken, it's a sign of a mid-term trend reversal and also exhibits a possible long term rally!

On the other hand, the contraction of short interests also indicates a bullish trend for Yahoo!, as seen in the following figure.


In summary, the fundamental and technical factors indicate that Yahoo! is on a right track for a bullish run!