BIDU Follow Up

Thursday March 27th I posted this follow up to the BIDU core short position which is at a nice gain (equity short as a trending trade) and what I thought was most likely moving forward for either a new short position or an add-to for partial/phased in entries (NOT DOLLAR COST AVERAGING AS IT HAS EVOLVED).

First here's last week's BIDU Update...BIDU Core position follow up...

If you are interested in BIDU you might want to check out the post, but the gist of the update was,

"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)....."

And where we stand as BIDU has transitioned from that daily bullish Hammer candlestick to the counter trend move up and it does not look strong which is what we want to see when looking to let a trade come to us and short it on price strength, but underlying moneyflow weakness.

 Daily chart with several head fake (Failed breakouts) from a large (technically ) bullish Ascending triangle, but when they are this large they are most often tops. The first and second head fake moves both would have lured in longs that buy on price confirmation of a breakout and put stops below former resistance/what becomes "support" and the market runs themm Both areas to the left were also "Tweezer Top" bearish candlestick reversal patterns showing resistance in the area. The 3rd head fake to the far right also would have triggered new longs on a break ABOVE former resistance found at the Tweezer top highs.

Then our bullish reversal, Hammer last week with increasing volume which is KEY to the reliability of transitional/reversal candlestick patterns , either bullish or bearish.

The same chart, #1 the first HF and Tweezer top, #2 second HF and TT, #3 the second bearish downside reversal with a bearish engulfing candle serving as confirmation of the top pattern in the candlesticks. #4 resistance from the Tweezer tops and #5 is the most recent head fake, causing longs to buy the "confirmed" price breakout which in typical head fake fashion fails and causes downside momentum as longs with different layered stops are taken out, adding supply to the market and driving prices down-THIS IS A KEY CONCEPT TO OUR "HEAD FAKE" CONCEPT WHICH CAN BE FOUND LINKED AT THE TOP RIGHT OF THE MEMBERS' SITE.

#6 is the Bullish "Hammer" reversal candle with expanding volume making it much more reliable, thus the update last week.

Here's a 30 min chart, you can see where support was broken on the Bullish Hammer and the short term exhaustion or capitulation event in volume making that  candlestick all the more reliable.

 I did not end up with a long BIDU position because the 10 min chart that has been in line and still is (if not slightly leading negative since prices moved up) never went positive which was my standard for a hitch-hking trade to the upside until a larger core short could be entered or added to.

 The 5 min chart had a positive divegrence at the hammer , but note the VERY typical reversal (rounding) process with a "Chimney" or a head fake that hits stops as we saw above with volume swelling.

Thus far since the hammer, I'm not impressed with price or price/3C action, it seems very weak which is fine with me as long as we can get a little more upside to make a new or add to position worthwhile.

 3 min showing the same small accumulation at the Hammer and so far NO confirmation of the move higher off the hammer, not even on a 3min chart.

 This is my custom DeMark inspired "Buy/Sell" indicator, note the sell signals to the left and the recent buy at the Hammer lows.

 On a 60 min chart my X-Over system has produced 2 of 3 long signals, but you really need all 3, that may happen, but again this is showing underlying weakness in BIDU as we expected to see, making it an excellent short candidate AS WE LET THE TRADE COME TO US RATHER THAN CHASING IT.

If you need a stop the 60 min Trend Channel has the current long stop at $151.90, however I'd be willing to give it a little more room and this is a stop on a CLOSING basis, NOT intraday.

So far, so good in BIDU, I'd set price alerts for higher levels where we want to look at adding or starting new positions, I have little doubt BIDU is an awesome short, I just want to make sure that any new entries are as favorable and timely as possible.