Nobody said short-selling didn't require some "cojones." In the face of what was a low-volume rally, a little courage was required to come after SINA and BIDU, which we discussed earlier in the day, on the short side as they rallied right into logical resistance at or near 90 and 130, respectively. Neither one made it through resistance today, so current closing price levels remain within range of short-sales on both BIDU and SINA.
The market's implosion late into the day was volume surged was not a good sign for the market, but the situation remains dynamic, so keep your stops in at the prescribed resistance levels give or take a couple of percent, depending on your risk tolerance. Thus for BIDU this would be 130 + 2 to 3% or for SINA 90 + 2 to 3%, max. This is a wild and crazy market, so be ready for anything. In the meantime the Market Direction Model remains on a sell signal, although it came very close to switching today without triggering a switch.
Profit target levels for each are outlined on the charts below:
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