There is no arguing against the selling pressure that BIDU has endured since hitting over $155 a share back in April. Today the stock plunged to fresh multi-year lows in spite of respectable market conditions. The last few years stocks like BIDU rallied 2-3% on days like today, but that was not to be so today as the stock got clobbered over the first few hours of trade.
Then, midday, the stock got a pulse and the buyers surfaced their heads pushing BIDU back over $93 a share. Earlier in the day $90.55 was hit representing the lowest intra-day price for BIDU since early 2010. The question now... has BIDU bottomed? Did Wednesday's $90.55 low represent a great buying opportunity? Or are we just in the midst of a breather before a plunge under $90?
I highlighted earlier this week the solid demand/support at $92. BIDU broke that early today but was able to poke its head above that figure. If $BIDU closes below that price, I will step away and exit my calls. However as long as BIDU remains above that price I am very bullish on the stock and think it trades back over $100 within a week or two.
While the chart isn't going to tell me how many shares the sellers have left, it is telling me that the sellers haven't been able to break support with any conviction. Even today's plunge below $91 saw the buyers step in and drive the stock back over $93.
I like the $97.50 and $100 calls for next week. I currently own the $100/95 calls that expire this week.
The $97.5 calls expiring next week are $.29, the $100 calls for next week are $.63. I like them both.