Is it just me or does it feel like every couple of months shares of Yahoo! Inc (YHOO) stage a rally and lure people in? I just looked over the list of today's top performing names and, of course, see Yahoo. This comes amid the news discussed here.

The last rally day I discussed was back in October. As was the case today, the shares were among the best performing as they traded at 12.98. Two months later, we find the stock up nearly 13% on the day as it trades at 12.00. In other words, even after today's rally, the stock is still down more than 7% in the last 2 months.

In yesterday's post on MEMC Electronic Materials Inc (WFR), I referenced the the boiling frog story and I think that applies to the paragraph above. Shares of Yahoo have a tendency to stage quick runs that gets people excited. However, those have so just been bounces amid a longer-term downtrend. While I do admit that the current news appears to be a good sign, I am still not sure it is enough.

Those of us who traded during the tech run-up of the late-1990s remember the glory that was Yahoo. It is tempting to want to believe that those days are back. However, I think the monthly chart provides good perspective. This is a stock that is still in a downtrend after breaking long-term support. I believe that warrants a cautious eye until we see signs that a rally can hold its ground for more than just a few days.

Chart Courtesy of Thomson Financial