Baidu (BIDU) stabilized today and it’s likely to be a decent money maker tomorrow morning. (May 21, 2019)
BIDU FN
We have an inside day on Baidu ( NASDAQ: BIDU ). This stock has absolutely been taken out to the woodshed and had all kinds of bad things happen to it back there. It’s an inside day today, where the high of the day and the low of the day was actually inside the open and close.
Now, typically that is seen as a continuation pattern; it’s like whatever the trend is then there is an inside day, which is kind of like a pause that refreshes. And then the typical outcome is you look for another move in the trend, the same direction. On these types of things it is really more of a reversal signal because what we are looking for here is the end of the big selling. Here’s the big selling pressure right here and then on this day not as much volume but definitely a bigger downdraft, almost another 10 percent down.
So when you see an inside day “in decision” what that means is that all of this selling has kind of abated and there are actually buyers that are coming in and taking the stock, they are having to reach to higher levels in order to get the stock. So the supply that has drove the stock down that far is gone; 121.12 is the top of the intraday range. I would suggest setting an alert there and if the stock starts moving above 121.12 then you want to be long the stock. So that’s how you want to be trading this.
Another one that could work out well, the same kind of deal, is Fabrinet ( NYSE: FN ). This is the Huawei fallout here; three big days in a row, huge volume and then today a big reversal. So we could see this as another stock that could be on the move tomorrow morning.
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