by John Lansing | October 20, 2010 11:14 am
Today’s chart of the day is Baidu, Inc. (NASDAQ: BIDU).
The company is one of the many set to report earnings this week, with its announcement scheduled for tomorrow after the market close. But unlike a lot of other stocks that could move on company-specific news, BIDU has a good shot of trading on its own technical merits.
The chart is showing a bullish pennant. This pattern follows a steep or nearly vertical rise in price, and consists of two converging trendlines that form a narrow, tapering flag shape. It is similar to a bull flag and a symmetrical triangle or bullish wedge continuation pattern; however, the bullish pennant only takes a few weeks to form, so it is a short-term pattern.
Short-term traders should consider a trade in BIDU. The key thing to watch for is continued high volume on up days and lower volume on down days.
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