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Today’s chart is of Baidu, Inc. (BIDU) which provides Internet search services. The company offers a Chinese language search platform on its Website, Baidu.com; and a Japanese language search platform on its Website, Baidu.
Ticker: Baidu, Inc. (BIDU)
What I Am Looking At:
- Shares underperforming the broader market, down nearly 6 percent year-to-date and 16 percent year-over-year
- Facing stiff resistance in the form of the descending 200-day moving average, 0 percent year-to-date level, the round-number $100 level, gap resistance, and the downtrend line
- Shares are breaking down from a bear flag formation
- Bollinger bands are pinching together, possible indication of imminent explosive move
- Peak call open interest for the June series resides at the 100-strike, which could add to the technical resistance drivers
- 10-day and 50-day buy-to-open call/put ratios showing extremes in optimism, both ranking above the 90th percentile of all readings taken during the past year
- Short interest continues to steadily grow since July 2012, showing the shorts are in control and selling all rallies
Strategy: Shorting at current levels, targeting 52-week low