BIDU – Playing the Breakout

biduweeklycboe

I don’t talk about counter-trend trades much, unless I see key time and price parameters that suggest it is worth taking a look at.

BIDU ($87.34, up $2.83.  52-week range $82.98 to $134.71) is what I’m looking at here on the weekly chart.  Now since this is counter trend, typically I suggest using something like a vertical spread since you are fighting the trend.  What I see on the weekly chart is a rather wide support zone way down at the 77.89-83.64 area.  I also see that we are on top of some Fibonacci  timing cycles that are suggesting a low and reversal.  On a 30-minute chart I see buy triggers in this one and am interested in an entry on a pullback to the recent low.

New pullback zone off the 30 min. chart is the $85.76 – $86.66 area.   My risk defined below the recent low.  The June 85 – 100 bullish call vertical spread could be trading near $4.40 if BIDU backs up below $86.  Risking ~$4.40 to make $10.60 (less commission) if first target approached.
Our first target is $102.69.  Our second possible target is the $108.98 – $111.90 range.