Take Money off the table on Baidu, watchout for Apple

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Jan 07 2008
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Did you notice the volatility displayed by the technology stocks on Nasdaq today? This is what a trader would love to see. A huge plunge follows by a reverse trend to the green, just like how the Dow and Nasdaq composite swung. FinanceTwitter had blogged that Baidu.com, Inc.’s (Nasdaq: BIDU, stock) support was at $350 which was breached during today’s trading, 7th Jan 2008. If only you had monitored how the stock was sold off within 10:15 to 10:35 trading hour today – all the red spikes could easily test your emotion.

At the time of writing, I’m not sure if $350 would be the new resistance or remains as the support for Baidu.com but I decided not to wait to find out. Instead I had closed the position and take the money off the table gauging from the volatility of the Dow and Nasdaq. It was a mere 15 percent profit for my BIDU Feb 2008 370 Put Option – how I wish I could sell when the stock was at $338 but then you just can’t, can you? Baidu.com is trying to climb back to above $350 but it depends very much on the overall market sentiment.

Baidu Profit chartInterestingly Apple Inc.’s (Nasdaq: AAPL, stock) also experienced the same force of selling during the same trading hour as Baidu.com, Inc. Hence Apple Inc. has becomes even more attractive with the current share price, only to prove you can never buy at the lowest. Just like Baidu.com, Apple Inc. is trying to climb back to above $180. You just need to buy in stages (assuming you would like to long the stock) at the current market’s volatility. If you do not take position, you might not get the current attractive price if the stock decides to swing or gap-up the next trading day. Similiarly if you decide to enter now, you might just be able to scoop it at a lower price tomorrow.

Baidu ProfitHence it’s really a hard decision but I believe if you think the stock is trading at “your target” price, it’s time to buy in stages. Meanwhile Google Inc. (Nasdaq: GOOG, stock) staged a magnificent rebound from the lowest of $640 to $655 as of writing time – talk about volatility.

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Hi Stocktube,

I noticed that you tend to trade big blue chip tech stocks. Seems that you are very specialised in this field..something related to your day job..just curious…

or is because Nasdaq is so violatile..(fun for speculators) for example..intel drop ~5USD in just 6 trading session?

Do you trade other big cap company like citigroup..etc

hello kris,

not all blue chip tech stocks – for example i don’t like stocks such as intel, microsoft, oracle, dell etc …

also, i don’t like huge financial stocks simple because they’re quite “boring” …

depending on whether you’re trading for middle-term or long-term, you will know which stocks to pick … most of the time i publish short to middle term trades which have the component of volatility (with fundamental value of course) …

happy investing …

cheers …

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