Baidu. Inc (NASDAQ:BIDU), Gilead Sciences, Inc (NASDAQ:GILD) and NVIDIA Corporation (NASDAQ:NVDA) have all settled into descending channel patterns on the daily chart, making lower lows and lower highs between two parallel trendlines. The pattern is bearish for the short term but can be bullish down the road.
- For bearish traders, the “trend is your friend” (until it’s not) and the stock is likely to continue downwards. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
- Bullish traders will want to watch for a break up from the upper descending trendline, on high volume, for an entry. When a stock breaks up from a descending channel, it’s a powerful reversal signal and indicates a rally is likely in the cards.
See Also: A Peek Into The Markets: US Stock Futures Down Ahead Of Consumer Sentiment Data
The Baidu Chart:
The Gilead Chart:
The Nvidia Chart:
