Welcome to the Baidu (BIDU) horror show. Those of you who bought the false rally on Tuesday are really hurting today. Hopefully, you had the sense to at least sell as the stock went up. The corrective bounce or dead cat bounce was expected and was a shorting opportunity, not a buying opportunity.
Let's forget about the past. Baidu is no longer a leading stock. Heck in a market correction, no stocks are leading, that is if you don't count the way down. As above chart shows, on a daily scale, you will notice that for the past two days, the stock sold off hard into the close only to show buying activity the last 30 minutes. Do not mistake this as a harbinger for a rally. It is a set up for further short. True, if you bought the close today, and if you sell quickly in the morning, the likelihood of a profit is there, but why chance it. (I am asking myself that question right now as well.)
Overall, Baidu failed and sliced through the $334 support level which now presents a formidable resistance. I believe Baidu may make a gallant attempt at $334 but will ultimately fail to hold that level. This means that it may also retest the lows of the day tomorrow at $315.57. It appears that the market makers will try to pin this around $320 tomorrow at OPEX.
If this stock breaks $315.57, look out! It will retest the $297 level.
Overall, horrible looking chart, unless you are a short. In that case, sweet dreams!
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1 comment:
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