SOHU trade ideas
SOHU May Be Ready To Close Oct 24 GapThe long tail on Monday's candlestick shows the market maybe ready to support the stock at this level, and an insider buy of 48,000 shares from the CEO has piqued my interest.
Bullish if it clears the $37.28 resistance established on December 13.
Bearish if it falls below $33.78 support.
SOHU Long-term DowntrendHarmonic downtrend (green trendline) since double top in 2013 and 2014; has been trying to find a base in the 40's but is now in the 30's looking for a base. Currently at high for short-term and long-term and has high probability to fall.
RSI confirmation @ 65. Historically, RSI here has done well at signaling short entries.
SOHU is currently in short-term swing upward (orange channel) but it is not expected to break 2 year trend yet for strong bullish move, also has a lot of room to fall @ current $38.99 price to about $30 in the long term.
Aggressive short-term swing low target @ ~$36 (this level will be a tough support level to break; may serve as support for new trend upwards after price drop to $36 level)
Long-term short swing initial target of $35 after earnings, then $30 for next target.
If $30 breaks, serious profit potential can follow.
Also, option players can long Jun 35 put; use far out expiration (red line) to give trade time to work and to reduce volatility crush effect on long option after entry.
~$300 profit per contract @ $30 expiration.
Head and Shoulders for SOHU on Weekly ChartMany are asking if the sell-off in Chinese stocks has stopped after the last two weeks' beatings.
It looks like they are for now, or with moderate downside in the next 5-10 trading days.
Looking at SOHU, it lost nearly 30% of its value in two weeks. Looking at the long term chart,
SOHU can lose about 17% from its current price to reach the bottom of a multi-year trend channel.
If losses in China accelerate, it could go through that trend bottom quickly to 34.00, and
with the long standing head and shoulder pattern, it could accelerate even lower.
The pattern has the top at 100+ with the neckline close to 40.00. That would indicate a potential
0.00 stock price/bankruptcy unless the federal banks and Chinese government act accordingly.
SymmetryGreat symmetry on both the up move to double top and down move. Would suggest consolidation and then another leg down. But reports Monday am with lots of activity on the Jan 70 Call. November open Interest suggests a 43 to 51 range
$SOHOLooks bearish here as this could be a macro HnS pttn. w/ the base or neckline being around the 67-68 levels & if price were to break these levels then the extn. of the move could bring it to around the 42 levels......has earnings come out on Monday
Sohu.com Inc (SOHU) Pounding Reveals Buy Level Chinese player Sohu.com Inc (NASDAQ:SOHU) is taking a pounding today on a weaker sales outlook. The stock is trading at $68.43, -12.99 (-15.95%). As the stock takes a beating, a level emerges that may just be a great long opportunity. This happens to be at the lows from August 2013 and also coincides with the daily 200 moving average. I have this level on alert in case the stock continues to fall in the next few days. The buy price would be at $60.00.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
