Stock Picks And Trade Ideas For Wednesday - BAC, DRYS, BIDU

We have seen an interesting rebound in stocks since the beginning of the week, following a few sessions of consecutive drops. I’m not quite sure if this rebound will definitively follow through. The volume of yesterday’s (Monday) session gave us a clear indication that something is wrong with this market - the rally was just a shot of fresh air before a new leg down happen. European markets had also a nice rebound but the macro economic picture is significantly deteriorating month after month. Fundamentally, the European economy is weak because of high unemployment and falling housing prices. The central bank is also content with cutting interest rates one to two more times before the end of the year.

With this market oversold, do not chase it down, but instead wait for a sizeable rally to short. Be careful with the euphoria, still playing on the defensive side.

Chart courtesy of stockcharts ( click to enlarge )

Baidu (BIDU) - It looks like there is just limited downside risk in the stock at current levels. On the upside, a move to the $280-$281 range appears likely. A close above $273 will have positive implications while a drop below $250 would negate the positive outlook. Technically the chart shows the stock is back to a new rally as K line is on top of D line. Hold the stock with a stop loss at $244,20.

Chart courtesy of stockcharts ( click to enlarge )

DryShips (DRYS) - The stock appears to have run out of sellers at current levels. The near-term outlook appears positive. A close above $25.98 would confirm the positive outlook and could push the stock to the target zone of $30.20.

Chart courtesy of stockcharts ( click to enlarge )

Bank of America (BAC) - The stock is showing signs of a short term top after rallying for almost 3 days. Technically, the chart shows weak sign as the stock is below both 50 day and 200 day moving average with MACD well below 0. However KD shows possible rally as K line is on top over D line. I’m looking for a good trade if the prices close above $27,25.

Disclaimer : Trading stocks involves risk, this information should not be viewed as trading recommendations.The charts provided here are not meant for investment purposes and only serve as technical examples.

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