Given the recent correction mode of Chinese Internet stocks, options trader Bob Lang of ExplosiveOptions.net charts the recent impressive movement of the leading Internet search engine of China and urges options traders to keep their eyes on it.
Chinese Internet stocks have been in correction mode since the beginning of the year, but the big dog, Baidu (BIDU), is up nicely for 2014. After a sharp 15% correction, the stock moved higher after bottoming out in April. The chart shows a beautiful cup/handle pattern on June 24, followed by a nice move higher on better volume. Given the fact that earnings season is on the horizon, this stock is poised to head back to new highs (I suspect $200 is next). Plus, you can’t ignore the MACD, which just sent out a massive buy signal on brisk turnover. We added the call on Monday as part of our options trading strategies, and it went up 50% in just one day! Keep your eye on Baidu, because it is ready to rock n’ roll.
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By Bob Lang of ExplosiveOptions.net
