BIDU

BIDU is an interesting stock here, it was a clear and very simple short set up earlier in the year and was one of the top performing care shorts until it was covered, I don't see a long term recovery for BIDU, but I do think it does have a shot at a move worth trading long to the upside, I'm just not convinced on the set up quite yet, but since I know so many of you are trading BIDU, here's what we have.

 This is where we initially shorted BIDU on a head fake breakout from a bullish triangle, it was already showing distribution in the triangle before the breakout so we waited for the breakout to enter shorts knowing that was the highest probability-a head fake, BIDU was covered/closed in the white area and good thing because it has been nothing but risk and opportunity cost since, however something seems to be stirring in BIDU.

 BIDU with a healthy move and volume and then the 2009 bottom and a big move, but volume has been FAR from healthy. Looking at BIDU'd price pattern, I'm at a loss to call this anything other than a stage 3 top, that doesn't mean it can't make a run higher, but longer term I don't see a great future in BIDU and probabilities are to the downside.

 The daily BIDU chart backs up this view, we don't often see leading negative divergences on a daily chart.

 Near term on this daily chart, I'm at a loss in identifying any price pattern here, if you see one shoot me an email, I do however see a clear resistance level and that is the only real upside magnet I see. I would be looking for a head fake move above the resistance area and to set up a new short position for the eventual decline, but until then, I think BIDU has a good chance of breaking above such a clear resistance level as traders will buy a breakout above such an obvious resistance area.

 The 4 hour chart shows where we shorted BIDU and why, it has had several positive divergences since and I think the current one can move BIDU through that resistance area and then probably some.

 Near term on the 5 min chart we can see the negative divergence sending BIDU down recently, I do think BIDU needs to do some consolidation work before it is a high probability long candidate with a chance to break above resistance.

 The 1 min chart's positive divergence from late last week explains BIDU's move today

However there's not much confirmation among timeframes, only the 2 min, this is why I say I think BIDU needs that consolidation work to put together a high probability trade, the 4 hour chart is there, but now the other timeframes need to fall in place. I wouldn't chase BIDU here, but I would keep an eye out for consolidation work and I'll continue to update it as it develops.