Bottom Triangle in Baidu (BIDU)

Read on to find the price target for BIDU

   

7 10 13 bidu 300x261 Bottom Triangle in Baidu (BIDU)
Click to Enlarge
Though the overall sentiment toward China always seems to be one of mistrust and caution, the technical patterns uncovered by the Trending123 Pattern Scan powered by Recognia are showing strength in one well-known Chinese stock: Baidu (BIDU). This is the Chinese equivalent of Google (GOOG), and despite some recent sideways action, a bottom triangle has developed that points to upside ahead.

A bottom triangle shows two converging trendlines as prices reach lower highs and higher lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks above the upper trendline with a noticeable increase in volume, confirming this bullish pattern as a reversal of the prior downtrend.

This pattern is confirmed when the price breaks upward out of the formation to close above the upper trendline.

Volume is an important factor to consider. Typically, volume follows a reliable pattern: volume should diminish as the price swings back and forth between an increasingly narrow range of highs and lows. However, when the breakout occurs, there should be a noticeable increase in volume.

Price Target: $110.00 – $114.00

InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in his day trading, options and trading services: Power Trading at the OpenParabolic Options and Trending123.  Trending123 members receive access to the Trending123 Pattern Scan powered by Recognia free as part of their membership.


Article printed from InvestorPlace Media, http://investorplace.com/247trader/bottom-triangle-in-baidu-bidu/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.