Last Update: 2.26.13
1.11.13 Wednesday
(Daily Chart | 200SMA-Red)
As the of title of this post acknowledges my intentions which is suspecting possible outcome because you must understand one of the Dow theory. “Trend is assumed in effect until it gives us definite signal of reversal” and as of now, we do not have any definite signal of reversal. So I must assumed that the trend is still in effect.
Red downtrend line (see arrows) has NOT been established (rule: two peaks to draw downtrend line and three peaks to confirm the trend line). We only have two peaks right now and the 3rd peak has not been established because $BIDU can and could continue to go up higher thus piercing through this suspected trend line. But that downtrend line has holding some value because it is traveling with 200SMA (red)
Here is why this could be alarming
- If or when this trend line sustains/holds and $BIDU starts to roll over, we are talking long term downtrend in effect making lower highs in a big scale (see long arrows).
- This downtrend line is traveling together with 200SMA (red) and that is a double confirmation that the downtrend line is holding some value here and should be accounted for more than general sense
- If this is all true and plays out, we are looking at massive downturn target to $76 which at some point of time, I will be entering bearish positions. (Not today though)
(Daily Oscillators | Stoch, RSI, MACD, MFI)
Most all of them are at overbought territory except MACD. MACD still has some room to go higher.
*Note: Just because these oscillators are at overbought or oversold status, it does NOT mean it has to roll over or bounce. Never trade off of the oscillators and only should be used as a gauge like a RPM gauge in your car.
Target Price of $76
(Daily Chart)
They are the exact same size of parallel lines and exact same size arrows as you can see on this chart.
If it rolls over, my target is at around $76 in about 3-4 months.
Side note: $76 is actually a major support from late August of 2010 so when or if it rolls over, it makes sense that$76 possibly could act as support to slow the bears down.
2.5.13 Tuesday
2.15.13 Friday
2.20.13 Wednesday
2.26.13 Tuesday
All out of my PUTS with nice gain
17 thoughts on “Short BIDU”
Hi Kay, I just checked the weekly and monthly chart. Indeed, BIDU is in a down trend. However, I could not quite understand how did you decide the downside target is $75. Can you please explain a little? Thanks.
@TraderEllen hey its a support from 8/27/10
@2kaykim But between 75 and 112.37, there are many other points too. Why didn’t you pick others? such as the 200MA?
@TraderEllen good questions Ellen. Its a measured move. Just look at the long red arrows and the trend measures and I am doing a possible measured target. So since we;ve been moving $40 size of downside moves so thats how i measured it that coincides with the support area. Just look at my first chart and see the long red arrows. those are about $40 moves downside and I am suspecting similar could happen
check out the updated chart. you can see it more clearly what I am trying to explain
@2kaykim Saw it. It is much clearer now. Thanks.
@TraderEllen sometime next week I will be buying some OTM puts expiration April or May.. but first need some confirmation of roll over from the candles
Kay, I should have got into this trade this morning or last wk. From the chart it is very bearish. Also, very strong resistance at 114.88 area. This should be a safe and nice ride.
@TraderEllen i told u about it before but u didn’t wanted to do it. plus this morning was earning
@2kaykim I don’t remember this trade. I must not have paid attention to it. Or well, there would be another one.
@TraderEllen trust me u think it was safe because u r looking at the chart that it gaped down. it didn’t look safe this morning. It was the ER so it could’ve gaped up or gaped down. thats y i keep telling you, you never know which was is going to be profitable thats why I have many positions.
Plus, I think the current resistance for AAPL is not as strong as the BIDU one.
@TraderEllen its same thing Ellen when it gaps down. Watch if $BIDU comes back up next 2-3 days, u gonna think $AAPL and $BIDU look the same… but the thing is I dont know if it ever gonna come back up same with no one knew $AAPL was gonna come back up
Hey there, I am learning technical trading and I love your site. You give out really good detail on charts. Can you please recommend any good trading chart software that is free or cheap. Right now I use stockcharts.com but chart images are really small and not many months detail. Also can you please recommend any technical trading books, which has lots of charts.
Thank you
Hey kim, nice analysis on bidu you timed it very well! Would you consider going long bidu now? It looks like 88 is a floor and last time it hit 88 it went to 110. It looks like its making higher lows and higher highs the past week as well. What are your thoughts? Thanks in advance!
@Killerfunpizza1 well last time we had high volume hammer to really hammer the bottom but this time the bounce seems rather weak. I would need more confirmation go to long.. also volume has been weak on these bullish run. If volume continue to decrease, I might even think about re-entering short.
Yeah…I got killed on my call I entered friday. Luckily I exited when I saw the high volume and bought some puts on Bidu. Looking for a $4-6 drop today to exit my puts and hopefully make a small profit after the call loss and put gain. It looked like it bidu could have bounces to $95 on friday, but as I learn many times it’s better to wait for the full confirmation and than choose a side … well anyways good call,