On Feb 14th I presented BIDU as a new or add to short position, I've had ti for a while and in the green as a core short, but needed to fill out the position. On the 14th I said I'd like BIDU as an entry > $170, but in the larger scheme of things, it wasn't crucial, it's just a better entry with less risk.
BIDU made that move and is at $173, I still like BIDU a lot as a longer term core position,
usually that means (when we are not in a trending market, but a choppy one or transitional one) that I want to give the initial position a wider stop as volatility and choppiness that are just hallmarks of transition could take out a tight stop with no good reason other than the stop was too tight.
As I said, I do like BIDU short here, either as a partial position, a new position or an add to, depending on your situation.
Nearly every chart since they were posted on the 14th has seen further deterioration.
The entry right now is VERY similar to our 2012 BIDU short that eventually gave up about 45% in gains with no leverage. The only difference between the two entries now and then is the scale, but as I often remind, "The Market is Fractal".
Take a look for yourself...
Entry now has a bullish ascending triangle which technical traders will see and look for a breakout to buy, even though it's a bit too large to be a true consolidation pattern, their buying is what allows smart money to sell in to demand/higher prices, this is exactly what we did last time at the head fake move, that has already failed as you can see rather than make the next leg higher as TA traders would expect.
The bounce since has been market correlated, I don't think it is on any BIDU strength itself, like I said, 2/3rds of the market will follow the broad averages.
This is the last big core short position we had in BIDU, a large sym. Triangle that is taken as bullish as a continuation consolidation pattern (continuing the preceding trend which was up).
At "A" this is the increased positive Rate of Change in price that "looks" bullish, but is more often than not a red flag warning the asset is about to top, these are the changes in character you have to look for and often they are opposite of what they appear to be. At "B" is the sym. (bullish) triangle which was also too big to be a real consolidation triangle and more often they function as tops or bottoms depending on the preceding trend.
"C" is the breakout head fake move that retail chased and we shorted, this gave us the best entry with very little risk, BIDU ended up losing -45+% without any kind of leverage, it was a core/trend short.
More recently, note the "Igloo w/ Chimney" to the far left.
As I often point out, bottom / upside reversals are often much tighter than the larger umbrella top reversals, but they are almost always proportional (meaning the size of the base is proportional to the size of the following trend which is proportional to the top reversal process).
At 1, 2 and 3 we have a bearish daily Shooting Star candlestick which is a reversal (downside) signal, a bearish, "Hanging Man" following the Shooting Star and today a nearly perfect Doji Star (bearish loss of momentum and indecision which opens the asset to a reversal).
The only thing that's missing is a head fake move on the reversal process, the "Chimney".
60 min chart showing most of the cycle from
Stage 1 Accumulation/Base to stage 2 Mark-Up or upside trend to Stage 3 /Distribution/Top, the last and final stage in a stock's cycle is Stage 4, decline.
Note 3C's divegrence in the flat toppy area.
The 30 min chart shows the exact same, again,
note the 3C divergence at the flat toppy area.
Intraday 1 min BIDU is seeing some trouble.
2 min as well
3 min
And 5 min is making a new leading low.
I'd like to see these a little more defined, but the larger/longer term charts show VERY strong bearish probabilities and I'd feel a little naked if I didn't have at least some BIDU exposure at this point in the market.
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