Gator's Chart of the Day

Gator's Chart of the Day: BIDU

Baidu, Inc. reported earnings July 23rd after market.  You can see the big gap up and close just below the 50 day simple moving average.  It's been working its way higher since then and is now consolidating just above the 200 day sma.  BIDU sports a forward P/E of nearly 21 (GOOG is only 13) but analysts still like it and have a target price of 168.  (Stats from Finviz)

The Trade
I've been in and out of BIDU this week using the weekly calls.  That approach is strictly for day trading and this strategy has little or nothing to do with that kind of trade.

An entry somewhere in the 131-132 range would require about 4% risk tolerance with a stop just below Monday's candle.  (That low was 125.70.)  While not visible on this chart, there is a gap from 142 to 144.50.  I'm looking for that gap as the target for the trade.  I'll be looking for call options as my vehicle and likely take a September strike as I need more time than August allows.  I would prefer October but they are not yet available.  I plan to buy in thirds.