This is my very first publication on Trading View! $BIDU

BIDU had a great run up past few weeks, very consistent and in-line with the direction of the market. However, I didn't personally consider it an out performer until it broke 285 resistance. Speaking from technical point BIDU broke a major resistance and pulled back into its original upward trend which started since Dec. However, today it failed to break through upper band of the channel and Fibonacci retracement. Meaning most likely we will see some pull back back and consolidation tomorrow.

Also there is new uptick in volume, which translates to bulls starting to take profit today from their prior longs and indicates considerable sell off. Hence the stock is very unlikely to make new highs tomorrow. Sell off may have been completed today or continue tomorrow depending on market condition. However under right market condition it will take few days for buyers to create an upward momentum in BIDU again.

However, as long as the market keeps up with making new highs, and doesn't change trend I expect BIDU to follow suit. If we see a pull back tomorrow, I think it is a great buying opportunity at $285-295 level with suggested stop of $10-$15. However I would have firm breakeven stop or close my position before going through earning report which is coming up next week.

My Personal advise: The market is overwhelmingly overbought and the news of stimulus and economical recovery and vaccine availability is already priced into the stock market. The main driver of the market right now is simply lack of investment opportunity in other asset classes, low interest and unprecedented cash injection by the government. All which puts the market in a bullish state with very fragile foundations. What all this translate to? At this time minimize your risk and stick to your stop orders because once this market start to break down it will do rather very aggressively and Government can only prop up the market to certain extend. Hence when the music stops you do not want to be the one hold the bag!

This is my very first analysis please let me know what you think?

I hold put options in BIDU, this is not a financial advise!

Best,

Ali

Comment:

Today the volume in Bidu has dropped significantly. It again signals that many former bulls closed their position yesterday and there were not many new buyers coming forward. Also, short volume had an uptick today. Over the last week and into this week we saw some short squeeze taking place sending the price of Bidu to all time high in many years. However, as I mentioned yesterday, I think it will take few days for buyers to come forward and move the price of Bidu even higher. So far current share-holders are not willing to sell lower than $300~. Tomorrow is critical. If short volume picks up further and buyers do not show up, we will see some temporary pull back in BIDU. If not, the price will however between 300-320 for few days and trend will continue. Again, BIDU follows spy trend closely it is close to 80 RSI if it opens with a GAP tomorrow, it will most likely fall back closer to 300 level. If this oscillation continues and it holds above 300, buyers will start packing at this level and send the price to mid 300s! Any significant pull back in BIDU will result in surge of buyer as many short holder will start to cover!

Comment:

BIDU trade worked as predicted; however, I didn't anticipate such great volatility. 285-295 was a great buying point two days ago. I have closed my long position at around 340 and just holding to my long term covered call option I sold to collect the primum. At this point BIDU is very volatile and has a daily range between 310-360. Breakout from any of this levels is very likely in close future and it highly depends on general trend of the market. One shouldn't open new position at this point (short/long) and those with pre-existing position should watch closely and take profit as they see fit.

Comment:

Well, I think the tide is turning for BIDU as you can see it tested a great resistance point at 285. I anticipate that it will have some recovery back to 300 levels however any recovery in BIDU will be short lived. BIDU is not out performing SPY anymore and it is responsible to close any long position on any recovery we might see next week. If at any point BIDU trades below 280 for an entire day that is a very bad sign for the stock and shorts have great argument.