BIDU Follow Up

Here's yesterday's update on BIDU, it also covers the larger trade perspective in a bit more detail.

I have a short position in the equities portfolio started in BIDU from higher prices that is at a nice profit, but I'm looking to add to the position as I left room to add and as I see BIDU as a trade with good longer term potential, in other words not just a 10% correction which has already happened.

 The long term daily 3C chart shows BIDU with very strong negative divergences, this is part of why I like BIDU as a longer term trade as well as the price pattern implied target.

 Here's the head fake move we shorted in to, BIDU is a good example of how a head fake move adds momentum to the reversal, take a look at the decline from the yellow area, that move is well over -12% in a short period. I'm expecting a downside target longer term of at least $80 and probably better. The Yellow arrow (part of a bear flag) shows large volume on a bullish candle, these are often short term reversal markers. There's a well defined area of resistance that would make for another head fake trap as traders would be expecting the bear flag to break to the downside, a had fake move up first will knock some of the shorts out, possibly bring in a few longs and give more momentum to the next leg down as well as giving us a better entry with less risk on new or add-to positions.

 BIDU really didn't decline much from yesterday's rollover and technically speaking from the traditional perspective, BIDU's price pattern looks very bearish for technical traders, the expectation among technical traders (which is just about everyone now) would be for BIDU to be among the stocks hit the hardest on yesterday's decline. Today there's also a potential symmetrical triangle forming, this would make for a nice spring board on a move through local resistance.

 The 1 min chart is nearly perfectly in line, there was no strong negative divergence here yesterday. If the intention is to distribute BIDU at breakout (higher) levels, you wouldn't expect to see any strong distribution before that event too place.

 The 2 min chart is already giving some flavor to today' triangle-looking price pattern as 3C is in a positive divergence here.

 The 5 min chart has seen a positive divergence form since yesterday's intraday weakness that has continued to move higher.

Finally the 15 min chart has several positive divergences as BIDU came to the end of its decline from the head fake breakout, there's a current leading positive divergence. If this holds, this suggests BIDU could make quite a nice head fake breakout move, certainly worth looking at shorting it or adding to a short.

A move above $136 should signal the start of a head fake move higher, you may want to set some price alerts.