Circling Back to Qihoo 360

 | Oct 23, 2013 | 9:00 AM EDT  | Comments
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I'm looking at a secondary entry to an original setup in Qihoo 360 (QIHU). Price is clearly above the 200- and 50-simple moving averages which supports a buy-side setup.

To review the original setup, there was a healthy price cluster of support that came in at the $73.95-$75.32 area. The zone included a .618 retracement, a .382 retracement a 100% price projection of a prior decline and two 1.618 extensions of prior swings. This was initially the zone from which Qihoo 360 rallied $21.72. Besides the price cluster at that last low, there was also a coincidence of three Fibonacci timing cycles that came due Oct. 8-10. The actual low was made on Oct. 9.

Since we did not make the initial upside target for the trade setup, I believe that the current pullback in this stock may be offering up another opportunity on the buy side. The pullback zone that I'm looking at comes in at the $84.12-$85.84 area. It includes a .618 retracement that also overlaps quite a few "symmetry" or 100% projections of prior declines. As long as this pullback zone remains intact, I'm looking at taking my buy triggers against the zone with the risk defined just below this same key decision.

The potential upside target at this point remains at the $100.31 area, which is still target No. 1 off the original setup.

I would consider myself wrong on the trade if the $84.13-$85.84 area is surpassed by more than $1 on the downside. For more information on the triggers I like to use for trade entries, please refer to this prior article.

Let's see if Qihoo 360 can resume the rally above this key zone or not!

 

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