BIDU: Double Nested Inverse H&S

After the breakout of the Double Nested Inverse H&S pattern that we looked at earlier in the week (there's a self-contained Inverse H&S pattern in the Left Shoulder, in white), BIDU took off to the upside and headed toward the target of roughly 134 that went IN PLAY (For the target, take the height of the BIG pattern, roughly 7 points, then add that amount to the breakout point, roughly 127).

As we know, multiple patterns/nested patterns can pack some punch when they break out or break down, strictly based on the technicals, but any news on the fundamentals "can" trump the technicals. Watch the REACTION to the fundamentals. The inital reaction usually is an emotional, subjective response, and sometimes can be very misleading.

In this example, BIDU announced that the release of earnings would be delayed and reported at the end of February instead of at the end of January, which was when the market expected the report.

Uh-oh..."the market doesn't like uncertainty." The delay causes worry. "What's wrong?" "Why are they late?"

Anyone who didn't want the worry, and who sold, did fine. That's a nice play: "Gimme the money...I don't want the headache!" They caught some of the gain on the breakout, and BIDU did sell off on the news and retested the breakout. The Bulls got handed "Ye Olde Knuckle-biter" when BIDU sold off below the breakout, putting it's validity in question, but BIDU didn't tank, nor did it take out the low of the Right Shoulder, which would have been cause for more serious concern.

"Right Shoulder lows 'shouldn't' get taken down." (The reverse for H&S Tops).

Instead, the BIDU Bulls stood firm, just below the neckline of the Double Nested Inverse H&S neckline, while the "selling on disappointing news" transpired. They also used it as an opportunity to put in a Double Bottom, which they broke out of on Thursday morning, so they now had a Double Bottom breakout giving added strength to the initial breakout the Inverse H&S. There was a pullback to the Exponential Moving Averages (EMA's) after that breakout, then The Bulls rallied it to a new high on the session then left it parked at the close near the highs at the session, "poised to go higher" to the 134.00 target IN PLAY.

Friday morning was a Breakway Gap Up opening with very little gap fill. The BIDU Bulls stampeded to the upside and the (roughly) 134.00 target got MADE in a runaway.

The disappointment about the delay of the release of earnings only was temporary. There was no technical damage done the chart on the "bad news" selloff. It would have been a much better performance if they had held the neckline and NOT put players through "Ye Olde Knuckle-biter," so their scores get marked down for that, but The BIDU Bulls did score the 134.00, which the power-packing Double Nested Inverse H&S pattern had indicated, so there you have it.

Scores For Technical Merit:

10...10...10...10...10....10 (they got their target)

Scores For Artistic Performance:

5...5...5...5...5...5...5... (knock it off with "Ye Olde Knuckle-biter," dang it!)