Trade Plan for BIDU

M

michaelscott

Assuming the 136 high holds in afterhours, I expect the stock to retrace to one of the following points...

136-14.18= 121.82
136-21.60= 114.40
136-28.80= 107.2

Afterhours volume was about 2 million and so most of the shorts might be covered by now. We are going to see profit taking and then there will be the pivot point which is crucial to the next part of this thesis.

*If the price goes above 136 during the open, then I will re-evaluate trading plan.*

Trade plan is to short if 136 holds to one of the retracement points. Then cover around one of the pivot points. Go long at the pivot.

I bet it will go back to 114.40 and pivot off of the floor gap. If and when it reaches there, the 50 day moving average will be just about there.
 
smells like another AMZN in the making. However I think AMZN is ready to drop a couple of points soon, at least back to 58-60 area.
 
Would be tough to drop to the price you wanted $110, lol, everyone would love to jump in and get a piece of it at the closing price!

Based on tonight's trading, here are the major fib support/resistence levels, green areas are 61.8% fib retracements from recent highs, orange areas are 38.2% fib retracements.

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Your chart assumes that the retracement will be the height of the gap. My calculations assume the height of the cup.

However, I made a mistake and did not look at the big picture. I was thinking that the formation from the start of the year was a cup, but actually its the handle. Since the handle is also a cup, Im assuming some retracement.

There was a break of the top resistance point set at 134.10.

If Bidu does not pullback, then long it with all your might. If Bidu does pullback, then long at retracement.

The price target becomes 223.66.
 

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Look at BIDU weekly chart, it gives you a bigger picture. BIDU is trading in an uptrend channel. The recent low is right at the bottom of the channel (with 38.2% fib retracement from recent high).

By looking at this weekly chart, do I hear $156? The next logical fibonacci extension is 4.236 after $136, the price at the upper trend channel around 4.236 fib extension is $156.5, so short as many shares as you can, but be prepared to cover fast, don't hold too long and be squeezed, possible a monster is in making. But who knows, it's everyone's guess. We'll check out this post in a few weeks.

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The cup and handle is the most popular formation right now. Its on almost every chart including the major indexes. Most stocks that trade with the market appear as the cup/handle formation. The stocks that do not trade with the market do not appear like a cup/handle.

Look at this chart of Google. The next conference call will break the resistance and then the price target becomes 682.

We are now setup for a grand breakout not seen since 1999 when the war started. The ISEE sentiment numbers are setup perfectly. The indexes have broken through the resistance along with the foreign markets. There are only a few equities left that have not broken through.

I have three revised thesises on the market that I just completed right now.

The first theory I have is that the Wilshire 5000 will keep going up until it hits 17829 and wont correct until April of next year (or later, within 12 months of April). That will be the end of the bull market. The formation will turn into a Bump and Run formation which is a definate chart topper.

The second theory involves a short correction which will prevent the bump/run. This correction will happen in a few months when the Wilshire is at 16684. I had previously stated a different number, but I revised it tonight after re-working my charts. The correction will be 717 points or 4%, nearly half the percentage loss of the current handle. This correction will bring the indexes down to the primary trend.

The third theory involves a failure to break the resistance which lies somewhere around 15250. The indexes will then retrace back to 14533 for a second stab at the resistance and then the grand run to 17000+ will occur with the bull market ending in April of next year or 12 months thereafter.

The reason why China is going wild is because of the Olympics. When the Olympics come and go, then that will be the finale.

Here is that Google chart. When Google reaches its price target of 682, then the bull market will most likely be at the end.
 

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Your first mistake is comparing two different stocks and placing them as equals.

In Amazons case, you have a pullback off the cup happening at 43.25 in late November. Then you have the second advance to 42 in late February followed by another pullback. When you have these long cup-like structures, you will always have a pullback. The primary cup was formed for Amazon in 2006 followed by the handle (which also happens to be a cup). Since that is a cup too, you have to have a handle.

Many people were shorting Amazon because they viewed the chart as a triple top. The triple top, however, is not always a reversal pattern. When the price broke resistance, then the formula for the target is

43.25-25.76= 17.49

45+17.49= 62.49

They also did not see this as a handle to the larger cup pattern.

There has been a great accumulation of shares the last few days and I will be expecting those guys to be dumping them on the crowd at the open.

I will expect a modest pullback. In any event, my future price target remains:

134.10-44.44= 89.66

89.66+134.10= 223.76

1.618X134.10= 216.97

Target range=216.97-223.76

You can also tell that someone was expecting this report to be good:

26-Apr-07 105.78 111.49 105.30 109.37 4,874,800 109.37
25-Apr-07 104.94 105.24 103.00 104.68 1,864,100 104.68
24-Apr-07 98.85 104.75 98.45 103.50 2,322,000 103.50
23-Apr-07 100.59 101.37 98.84 99.56 903,000 99.56
20-Apr-07 99.53 100.50 98.05 99.60 1,519,100 99.60

Too much volume. These guys will be selling to the crowd tommorrow.

In comparison, the volume didnt spike for Amazon before the call.
 
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