It's been almost four months since I published the pair trading idea titled 'BABA/BIDU, pair trading opportunity'. I felt great to catch this one and suggest closing the position around 1.15.
From the chart, it's easy to see a sideway pattern has been formed with upper and bottom boundary of 1.20 and 1.05, respectively.
My trading strategy is to buy the pair when it comes to 1.05. As I mentioned in my previous post, 1.5 is my target depending on how strong the momentum is. The basic idea behind this is statistics, central limit theorem that I believe the ratio will go back to its normal range.
Of course, there are other things as well. It's my personal favor of BABA over BIDU. I use Taobao, Tmall, the products of BABA almost everyday. BIDU? probably just use the search engine two to three times per week. I'm not saying that BIDU is not a good company. What I mean is that compare to BABA, BIDU is less competitive in my view(Sorry for BIDU fans, it's my personal feeling).
Admittedly, BABA's price has been hurt a lot by the anti-trust investigation and business uncertainties along the way. But it seems to me that government didn't aim at shutting it down. The fine was just a one-time-off pain. In my opinion, the show must go on. BABA will grow in a lower but stable rate.
That's my projection. Let's see how the pair performs in the future.
Give me a like to support me. Thank you very much.
From the chart, it's easy to see a sideway pattern has been formed with upper and bottom boundary of 1.20 and 1.05, respectively.
My trading strategy is to buy the pair when it comes to 1.05. As I mentioned in my previous post, 1.5 is my target depending on how strong the momentum is. The basic idea behind this is statistics, central limit theorem that I believe the ratio will go back to its normal range.
Of course, there are other things as well. It's my personal favor of BABA over BIDU. I use Taobao, Tmall, the products of BABA almost everyday. BIDU? probably just use the search engine two to three times per week. I'm not saying that BIDU is not a good company. What I mean is that compare to BABA, BIDU is less competitive in my view(Sorry for BIDU fans, it's my personal feeling).
Admittedly, BABA's price has been hurt a lot by the anti-trust investigation and business uncertainties along the way. But it seems to me that government didn't aim at shutting it down. The fine was just a one-time-off pain. In my opinion, the show must go on. BABA will grow in a lower but stable rate.
That's my projection. Let's see how the pair performs in the future.
Give me a like to support me. Thank you very much.
Заметка
The pair gapped up by over 2% today even before retesting the bottom of the sideway zone. Заметка
It's coming towards the upper zone. 
plan your trade and trade your plan
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Все виды контента, которые вы можете увидеть на TradingView, не являются финансовыми, инвестиционными, торговыми или любыми другими рекомендациями. Мы не предоставляем советы по покупке и продаже активов. Подробнее — в Условиях использования TradingView.
plan your trade and trade your plan
Похожие публикации
Отказ от ответственности
Все виды контента, которые вы можете увидеть на TradingView, не являются финансовыми, инвестиционными, торговыми или любыми другими рекомендациями. Мы не предоставляем советы по покупке и продаже активов. Подробнее — в Условиях использования TradingView.