Check out this competitor of Baidu (BIDU). We’re close to a re-entry! (January 15, 2013)

by DAN QIHU 
I’m Dan Fitzpatrick at StockMarketMentor.com on Tuesday, January 15th. Today let’s look at Qihoo 360 Technology ( $QIHU Qihoo 360 Technology Co Ltd ), a Chinese Internet company, I believe rivaling Baidu ( $ BIDU Baidu.com, Inc. (ADR) ), which is the big dog on the porch. This is a stock that we’ve been on for a while, I’d like to say since right back here at $13.67, but I would be lying. But we’ve been on this for a while; one of our bright guys, Josh, had told me, he said, “I think this company is going to do really, really well in 2013.” The reason I’m giving him credit, by the way, is because first of all you want to give credit where credit is due, but also more importantly, if the stock does manage to crash and go down to $15.00, then I can blame Josh and it won’t be my trade. So anyway, lest that happens we want to be managing are trades like risk managers as opposed to gunslingers, but here’s what I’m suggesting. I think if you were long this stock and caught it on the breakout, you’ve got one of two choices; you can either sell now, knowing that you were at least a day late to be selling, because the stock had been trading sideways, then yesterday, really kind of had a decisive down day on heavier than average volume. So that would be one choice. The other would just be to hang on with the knowledge that you’re probably going to get lower prices. I think this stock, there’s nothing wrong with the uptrend, this is just the ebb and flow of stocks baby, this is what they do. Consolidation, nice break out here on high-volume, then what happens? Well, everybody gets all flustered and the stock trade sideways for what about a month, and then we get another blastoff. Well guess what’s happening now? We’re certainly not getting more upside, we could be stopped right there or we could fall all the way down, I don’t know. What I’m talking about here, again, is just risk management. So if you’re looking to buy this stock you’ve got to know that it’s still extended. If this was a IBD 50 stock what you would see, in the little box there, is Qihoo 360 ( $QIHU Qihoo 360 Technology Co Ltd ), still, I don’t know, 15 percent or 20 percent or whatever it is, above its last buy point, something like that. The bottom line is this stock is still extended, doesn’t mean that you can buy it, buy any stock you want, anytime, at a low risk trade, as long as you define your risk. So it doesn’t mean that you can’t buy it. What I’m saying is, buying it now, two days after this kind of move, two down days, I think that’s a bit of a risky trade. I, personally, have not been in this trade, much to my embarrassment and chagrin. What I will be doing is waiting for a better entry, I want to see this stock drift sideways a little bit, maybe pull back, but I’m just not going to buy this stock right now at $30.00, I’d rather buy it down to $28.00 or so. Anyway, that’s my analysis of this stock. Members, I want you to get over to the Strategy Session because I’m going over some stocks that I covered last night and a lot of them are actually doing pretty good. I’ll see you there.

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