PPR - Baidu, Inc. (BIDU) Pocket Pivot March 10 2011

Published : March 10 2011 at 19:38 ET

Surprisingly, despite all the carnage today, Baidu, Inc. (BIDU) quietly flashed a pocket pivot buy point today. However, given the action of the general market and the fact that the Market Direction Model is on a solid sell signal, it is probably a higher-risk proposition to buy shares of BIDU. However, if the market stages some kind of reaction rally or bounce from today's closing levels, BIDU might be worth a trade, perhaps using a 3% stop at today's intra-day low around 117. Some of you may have also noticed volume on Netflix, Inc. (NFLX) that looks like a pocket pivot volume signature, which it is, but the stock did not hold above its 50-day moving average, hence is NOT a pocket pivot buy point on NFLX. BIDU, on the other hand, remains well above its 50-day moving average and closed just above the 10-dma, so technically it is a bona fide pocket pivot buy point. The overriding question, again, is whether the probability of being rewarded on the long side of anything given the general market's behavior currently is worth the risk.

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