BIDU Core position follow up...

BIDU has been good to us the few times we have shorted it, we've had some of the best, textbook head fake moves in BIDU, in fact I often use our first short as an example of a textbook head fake move and how/why we let them come to us and what we look for (I remember well as I had a slew of new members all hot on buying BIDU when we had been stalking it for a short on a head fake move for several weeks... it turned out we did fantastic on the move considering where the market was at the time).

As a core short position in the tracking portfolio, I have room to add and I'd love to, thus far BIDU  has given us an +11.75% gain on a straight equity short (no leverage) which is what I prefer for a trade that has trend probabilities, they are so much easier, set them up and let them be.

I have been watching though and looking for a bounce to fill out the rest of the position which is maybe about 80% there.

Here's what we have...

 On a daily chart we have stage 1 base/accumulation, stage 2 Mark-up or what we'd usually call rally, then stage 3 distribution or top.

Note the BULLISH consolidation/CONTINUATION  Ascending Triangle which proceeds an uptrend, it's in the perfect place, it tells technical traders that BIDU's move to the upside is taking a break, but as the triangle matures and approaches its apex, the trend up will continue, thus "consolidation/continuation" price triangle. Volume was okay, but it should really decline as the pattern matures and as we reach the apex, a breakout when it's about 2/3rds complete is considered a very bullish event and right at the first orange arrow you see that breakout that was a head fake move or failed breakout, traders buy that move as they see it as confirmation of the triangle.

The first breakout also failed with a "Tweezer Top" resistance pair of candlesticks denoting strong resistance/distribution at the area.

The second breakout came as the triangle was complete, it too failed and it too failed on a "Tweezer Top" pair of candlesticks, again denoting resistance/distribution.

The second breakout is a perfect example of a head fake move and what it is suppose to do, note price just went straight down to break below the triangle's support after that, this is a function of the longs having stops hit and causing a snowball reaction of supply (#4).

At #5 we have ANOTHER move to the area of the Tweezer top resistance, this time a slight head fake move just above, just enough to trigger limit orders and that failed.

Right now at #6 we can see a daily hammer candlestick today, that's a bullish upside reversal, although it carries no target, but you can probably guess where a target might be based on the past. I'D TRADE BIDU LONG RIGHT NOW ON SOME CALLS AND THEN SHORT IT AS IT REACHED A HIGHER LEVEL ABOVE THE TRIANGLE AND FILL OUT MY CORE SHORT (I would not close the core short as it already has excellent positioning).

The problem is there aren't enough 3C signals that are strong enough, but there are other signals. If I didn't have 3C, I'd already be long BIDU for a quick piggy back or hitchhiking trade.

 This is a 50 bar exponential moving average on a 60 min chart, you can see it has been perfect resistance for BIDU during the downtrend. The recent dip lower is a change of character, if we drew a channel around BIDU instead, you might call this a channel buster and changes in character lead to changes in trends. Now I don't mean the primary short because the change in trend is really on a shorter scale. Volume also increased, yesterday I noted this market wide as looking like a mini "capitulation or exhaustion" event.

My Custom DeMark inspired Buy/Sell indicator has been right on as far as sell signals, I'm assuming its buy signal is going to work just as well, however I still need more evidence and it can come quickly.

 This is the daily 3C chart, you can see the stage 1 base/accumulation mentioned above, stage 2 confirmation/mark-up and stage 3 top/distribution on a strong daily chart leading negative divegrence.

I could show a lot of charts that tell us BIDU is a short overall, but if we can ride a bounce and enter a short or add to at higher levels, all the better, especially for new positions.

This 60 min 3C chart is an extreme leading negative divegrence and price just followed right along, that's why I call them leading, they lead price, but the actual 3C level vs price has nothing to do with the target, price reverting to the mean of 3C in what is confirmation usually tells us when we are at a target level and should tighten stops and start taking profits (3C'S NUMERICAL VALUES ARE IRRELEVANT), obviously we have a lot more downside over the coming months and perhaps even years with that daily negative.

 Starting from the other end, 1 min we do have a positive at the capitulation event.

The 3 min has a leading positive

That's about as far as we go, we could get enough today to enter a position, but right now it's on the watchlist and does not have the confirmation needed for a high probability trade, but it does have good probabilities that it will become a high probability trade soon.

At the 10 min chart we can clearly see 3C is confirming the price trend nearly perfectly.

If this chart were to go positive, I'd definitely take out at least April calls, although I think you can get away with an equity long here if we hit the 10 min chart so BIDU is on the radar as well.