BIDU: Heading Into Earnings

BIDU's Friday morning Gap Up opening and strong move higher looked like "The Tell," suggesting that the mid-week take down of the bullish Inverse H&S pattern was a Bear Trap, as I suspected, and that BIDU finally was going to move higher off the Channel breakout that we've been looking at in the daily chart.

This Symmetrical Triangle looked lovely. Both the top and bottom had been validated as resistance and support (the white arrows) and, forming after the big move up off the opening, it "should be" a bullish continuation pattern that resolves to the upside.

Given how sloppy The BIDU Bulls have been since the Channel breakout in the daily chart, and given the fact that I've been "paying up" for BIDU most of the week, I wanted the perfomance that I was paying for, and no nonsense. I wanted to see this pattern breakout and GET GOING, dang it!

I bought 2,000 BIDU at 126.00.



UGH. She broke out...then was back in my face for "Ye Olde Knuckle-biter," back below the breakout, just like she's been doing in the daily chart since the Channel breakout. I had had enough of that nonsense.

I had "paid up" for the stock and didn't have any room to find out if it was a fakeout, or not, so I threw it in for a small gain, at 126.04. I thought that I had a good read on "The Tell," but I wasn't willing to pay to find out.

Sloppy...sloppy...sloppy.



Arrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrgh!!!

You have to have a sense of humor in this game. As good as my read of "The Tell" was, Ms. Market got me gooood on that one! I would have been fine if I hadn't fine-tuned it with the 1-Minute chart, but this stock moves very quickly and I didn't want to get caught in a quick downdraft. Oh, well...

As much as I would have liked to have had it, I'm not going to chew myself out for missing it. I've sold plenty of times on trendline violations and on "Ye Olde Knuckle-biter" and have been rewarded for doing it, so that's the breaks. I will say, though...

Curses! Curses! CURSES!!!



Here's "THE TELL:"

1. The Bullish Inverse H&S broke out to the upside, but it was a Fakeout/Breakout. Bulls who bought it were disappointed. Bears who bought to cover their shorts were disappointed. The proverbial "everyone" got busted.

2. The low of The Head got taken down at the first red arrow. That's usually bearish, but it was a Fakeout/Breakdown. Bulls who sold the breakdown and Bears who shorted the breakdown (both very reasonable plays) got busted again because the takeout low got successfully retested (second red arrow), and the stock went higher.

3. After The Bulls broke out of the Ascending Triangle at 123.50 on Wednesday and the target of 125.00 got MADE (see that chart back on Wednesday), BIDU opened down on Thursday and went through 123.50 like a knife through butter. Look where it stopped going down: 122.83 (horizontal yellow line). That was a successful retest of Wednesday morning's 122.84 Gap Up high (yellow down arrow), then BIDU raced higher, to 127.21. That looked like the "real move," enticing Bulls to buy again and Bears to buy to cover again, but it wasn't, and they both were disppointed again as BIDU moved down ... down ... down on Thursday afternoon.

When BIDU opened gapped up on Friday and raced higher, that looked like "THE TELL," that the "real move" was about to unfold, which is why I got long at 126.00 (orange arrow), but I got disappointed along with "everyone" else after I threw it in, questioning my read, then later saw what unfolded. Wow!



The "real move" was a much larger Bullish Inverse H&S breakout, packing plenty of power!

It turns out that the initial Bullish Inverse H&S (in yellow) was a "fractal" (repeating pattern) that formed what became the Left Shoulder of the much larger Inverse H&S (in white) that was to come.

Great example of how charts can "morph," or change, into something else as they unfold. It's also a great example of how Ms. Market will disappoint the greatest number of people possible with all of those fakeouts, prior to the "real move" out of the BIG Bullish Inverse H&S.



So-o, after the sloppy breakout of the Channel, back and forth above and below the breakout, BIDU powered higher into the release of earnings, which is slated for Monday, according to Yahoo Finance (check me on that). That's always a "wild card." As nice as the chart looks, the bullishness always can be trumped by a poor response to earnings.

On a pullback, The Bulls "should" defend that neckline of the BIG Bullish Inverse H&S pattern in the last chart.

Gain: a paltry $75, but I earned every penny of it trying to figger this one out! LOL.