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.

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Carolyn Boroden

Carolyn Boroden is a commodity trading advisor and technical analyst specializing in Fibonacci analysis. Her unique form of price and time analysis is quickly proving to be one of the most promising trading techniques using Fibonacci available today. Ms. Boroden's first book, Fibonacci Trading: How to Master the Time and Price…