BIDU is pretty much the Chinese Google. It’s a stock that has split a few times. As a company, it does not pay dividends. From a trading perspective, this stock can move! It is quite volatile.
The market is resting right now, which is good for some of these tech stocks, which were just on fire. BIDU has been in a consolidation for a few months now. The $166 area is a super strong support. Like Jerremy Newsome doing 120 on the triceps machine in the gym last night strong. It is also at an all-time high. BIDU has been making higher lows and has an unfilled gap from back in late September. Both the exponential and simple moving averages are bullish and had a very nice candle on 11/26 off of the 50 EMA. Therefore, on BIDU, I would like a close above $171.55. If BIDU is above that price in the last 15 minutes of the trading day, that would justify a bullish close for me. I want to get in before the actual close, in case the next day the stock really gaps up hard. I want to be in, if that happens.
Trading strategies from here are simple. IF BIDU closes above that resistance, it’s likely bullish. So, one could simply buy call options, or buy stock. One could still currently do a bull put spread on BIDU. Sell to open the $150 put and buy to open the $149 put. That could be done with a December week 4 expiration and currently get around $0.13 cents for the credit spread, which represents about a 13% return on the investment (since the margin is only $1.00).
Obviously, risk mitigation is always the key. Stop placement would go around the recent lows of the candles and below which would become old resistance/new support; approximately $162.61. First target based on Fibonacci is $189.86. Give the trade some time. It could take a few weeks, potentially, for BIDU to get there. So, hypothetically, if this stock were to trigger tomorrow, a Feb or March call option would be sufficient. This could really be a fun trade.
Make sure you know what you are doing and if you have any questions, feel free to ask!
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