August 6, 2011

Bearish Engulfing of BIDU

  • BIDU has given a bearish engulfing pattern in weekly chart.
  • Price managed to close above its 20 week moving average. But the Bullish technical setup has suffered some damage. 
  • Next dip below 20 week moving average may take the stock to lower bollinger band in weekly chart.
  • Shorts are safe to hold on till it stays below 20 Day Moving Average. MACD has given a good sell signal following negative divergence. One can spot negative divergence in MACD Bars. So at higher levels stock may face selling pressure.
  • Having said that the major trend in weekly chart is still up. So Close above 20 Day Moving average can be kept as stop loss for shorts.

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