BIDU is one of the long Call (Feb. 13th $105) positions still open, it's down about 22% which believe it or not, doesn't bother me much for an options trade, that can turn around in a flash. BIDU will also be posting earnings tonight, from what I see at this point, I'd hold the call position in to earnings (I wouldn't open a new option position right before earnings with volatility issues in front of earnings which makes it very hard to overcome the premium), but so far I see no reason to close the Calls. If BIDU was up big in after-hours, I'd prefer to take advantage of that volatility.
Here what we have long term, call position update, earnings and mid term.
Since BIDU broke out above some resistance it has put in a consolidation pattern, it's not a perfect bull flag, nor pennant, but it is consolidating away from the preceding price move which is what you look for in a consolidation so that's good for the near term call positions.
Long term on the daily 3C chart, BIDU was accumulated in considerable size for something close to 9 months and bottomed before the market . The distribution started in late 2010 through 2011 and we entered the Core short in BIDU Q1 of 2012, around March-April and got just about as good an entry as anyone could ask for, literally something like a percent or so from the highs at the yellow box.
Longer term there's still a leading negative divergence to contend with, but within that in the mid term there's a relative positive divergence at the lows that brought BIDU to where it is now, so there could certainly be some more upside, although this isn't one that I'd be looking at as a long term long position like some of the others we looked at, in fact I'd most likely be looking for the next short set up, of course the market needs to tell us which way to go, but as it stands now, that's what I'm getting from the chart.
The 15 min chart positive at that low I mentioned above and a smaller negative divergence to form the consolidation with a positive divergence in the consolidation, it all looks set for a move to the upside which those calls should benefit from.
Intraday on the 1 min chart, we are seeing some momentum in 3C, so I sort of wonder if there's either a leak or strong expectations for BIDU in to earnings, perhaps they expect it to hit a higher whisper number that is above consensus on earnings- that would certainly be in line with the mid-term outlook on the first chart, especially if guidance wasn't all that great, but the earnings beat was.
On the 60 min chart you can see where we entered the core short in BIDU at the yellow box, which was a head fake breakout which we already knew would fail because of the distribution already present before it even started, this is one we were waiting for to break out so we could short the better price point. Since BIDU has been roughly in line with a few notable divergences on the way down, it also appears in the near term that BIDU will see some more upside, so whatever earnings are, I'm guessing BIDU has a decent reaction to them, always wait for the next open as after hours is not a good representation in most cases.
No comments:
Post a Comment