Entry Technique for BIDU

Very interesting read below.

http://apnews.excite.com/article/20100211/D9DPPJ180.html


Not to get too scary ,but i believe we are on the verge of a war. The time frame is probably this weekend make sure to watch the fireworks.

OK BIDU: When ever I lose money on a trade I like to exit and look for reentry. This is the sign of a professional. Now i am not a pro and don't think I am. When looking at the technicals we have the following:

Weekly Chart: Over Bought Stochastic, Sell Signal MACD Histogram, Weak MACD lines

Daily Chart: Power of bulls is considerably less than the last gap up from Google news and less volume. Weak MACD Lines and Histogram. The most important piece of the puzzle is RSI. It has failed to make a new high with the new high. This shows that underlying strength is not there. Also volume isn't backing this move.

We have had 6 gaps From January 1st. The chart looks like Swiss cheese. These gaps equal over 100 points. Whether it be on the short or long side people have gotten burned with this guy time and time again. Jim Rogers states in the book Market Wizards. "I short a stock when it starts moving in gaps." Take a look back at GLD. This ETF starting gappping every morning this December. Would have been a really good short.

My plan is this. Once BIDU makes a new high with a lower MACD histogram on the daily chart i will buy the March $390 puts. My entry technique will be on the 2 minute intraday chart. When BIDU makes a new high with lower RSI and CCI readings; will purchase the put options.

This play has the highest risk reward ratio and it is all that I am gonna focus on for the next three days.