Firstly of all, my pair trade setup of BABA/BIDU is really successful. you can check the linked idea below.
Secondly, the free fall of BIDU was triggered by fire sale from a hedge fund who was believed to be default late last week. ViacomCBS, Baidu and some other stocks have been impacted a lot by the liquidation.
Thirdly, look at the free fall angle. I don't think it's sustainable. After the massive sell, I'm looking for bullish setup of BIDU because the fundamental of the company has not changed.
Trigger part: 60 minutes with bullish patterns, e.g. bullish engulfing pattern
I would expect the trade will give us a quick 20%-30% return in the next few days.
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I got two setups, one aggressive and another is conservative pullback buy long.
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Right. Momentum looks good. aggressive setup is active. Attached is a 1m chart, I can still identify a nice retest setup.
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Yesterday is not a bad day. The aggressive setup helped us to get a 2% return. With the gap-up today, I'm eyeing on yesterday's high as short-term trouble. Once penetrated, there should be some room to go up.
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Market opens and it looks Bidu is following the strong momentum in HK market where it listed a few days ago. It becomes an important indicator.
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Price moved between the range of 216 to 224. Looking for more buyers to come in.
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After consolidation, the upper range boundary has been conquered firmly...Now, the probability of further going up is likely.
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Alright. It's a fake breakout and price formed a beautiful bullish pattern. Let's see how it respond to previous high.
Any comments on further development of the chart, are we back in downtrend?
JICPT
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@jack_russel, Hi Jack, as Bidu is listed on both HK and Us markets, we can get a clue on how it might perform based on the price movement in HK market. It's a bit weak today. However, it's been impacted by possible anti-monopoly probe in China. When it's over price will go up in my view. From the chart perspective, it's downtrend on the 60m with bottom range being violated. Hopefully it's clear.
jack_russel
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@JICPT, Hi, thanks for getting back. Hong Kong seems to follow NY, but indeed the ant monopoly is playing negative influence on all Chinese stocks. I am fresh with learning to read charts better. What do you mean by 60m?
BangkokEye
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Consolidation period after such a big drop and partial recovery? I would also note that there hasn't been much in the way of news/announcement lately, I think that quarterly results are coming soon? Last time it rallied before the results were published. Looking for the next push to 250.
JICPT
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@BangkokEye, Right. It's coming soon. in the past 2-3 days, market is quiet, waiting for Q1 report. Maybe can play the volatility this time.
BangkokEye
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Brave buyers last Friday at the fall, I was tempted but wasn't sure if more shares were going to be dumped on Monday. They could consider a buyback. ARK buying daily too....
JICPT
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@BangkokEye, I agree with you. Normally I want to see bullish patterns on small timeframes. That would make me more confident.