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NASDAQ:BIDU trade post-mortem

October 18, 2011

Despite having a trading plan for Baidu (NASDAQ: BIDU), I sold and exited my position for the following reasons:

– market context: Trend day to mark the first day of a sell off / pullback

– Baidu gapped down and could not recover above yesterday’s open

– inability to reach 139, or even Friday’s hi.

– Baidu is overbought on the daily chart

I gave my trade the benefit of the doubt by not selling the opening gap down.  But the inability to recover above the open, and the ensuing weakness led me to sell.  I believe Baidu is preparing to fill the gap.

I will look to buy back between the gap fill (133) and 131.


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