Baidu, Inc. provides Internet search services in China and internationally. It operates through two segments, Baidu Core and iQIYI.
Take a look at the 1-year chart of Baidu (NASDAQ: BIDU) with the added notations:
BIDU has formed a key level of support at $160 (green) during the past 4 months. The stock just hit that level again and got a bounce. However, if the $160 support level were to break, lower prices should follow for BIDU.
The Tale of the Tape: BIDU has key support at $160. A trader could enter a long position at or around $160 with a stop placed under the level. If the stock were to break below the support, a short position could be entered instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT