BIDU Swingtrade

Last Thursday a reader sent me a question asking me what I thought of BIDU. HERE was the response I gave. In short I told him that I would wait until BIDU came back to test support around $280 before buying. Below is the chart from last Thursday.

Now look at the most recent chart below. Support was tested again, which held, and then rallied about $8. These types of trades are exactly what we should be looking for as short-term traders. We knew that buyers would likely defend $280, and they did. From here I would look to take profits around $290. Why? Because there is too much resistance overhead and have already realized a decent profit that we need to protect. I would then sit on the sidelines to see what develops. There are several scenarios that I will be watching for:
1) The test of $300. Lots of resistance there and I would look to enter a short position.
2) The test of $280 again. We already know that buyers are ready to defend this level so I would look to get long again.
3) The failure of $280. If this support level breaks it would be an excellent opportunity to enter a short position.