This is a longer-term pattern than we usually feature, but with Baidu (BIDU) up more than 10% this week, it sure makes you sit up and take notice–especially when the charts suggest additional upside ahead.
The Trending123 Pattern Scan powered by Recognia has detected a diamond bottom pattern that has developed in BIDU over the past 168 days.
Click to Enlarge The diamond bottom pattern begins during a downtrend as prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward. When the price breaks upward out of the diamond’s boundary lines, it marks a significant reversal to a new uptrend.
Price Target: $130.00 – $136.00
Criteria That Support
- Moving Average: Watch for the 200-day Moving Average to flatten out. Then watch for the 50-day Moving Average to cross above the 200-day Moving Average. This should signal the breakout.
Criteria that Refute
- No Volume: A lack of a volume throughout the pattern is an indication that this pattern may not be reliable.
- Short Inbound Trend: An inbound trend that is significantly shorter than the pattern duration is an indication that this pattern should be considered less reliable.
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 Open, Parabolic Options and Trending123. For a great deal on Parabolic Options, click here.
