BIDU: What a Difference a Day Makes

Jan 13, 2010: 5:06 PM CST

On news that Google (GOOG) might be pulling its services from the Chinese Market over long-standing disputes, shares of Google’s competitor Baidu.com (BIDU) surged today, bouncing off a critical weekly support level to recapture lost territory and now stands dollars shy of a new lifetime high.

Let’s see this bounce move on the weekly frame.

This chart highlights the price movement of BIDU starting in mid-2007 which captures the peak in late ’07, bottom in December 2008, and march to new lifetime highs in 2009 (and likely 2010).

The main thing I am seeing in regard to the current chart is the potential bull flag that just triggered today with a surge off the 20 week EMA at the $400 per share support level.

If this truly is a bull flag we are seeing (or more appropriately, an AB=CD Measured Move pattern), then we could see price rise at least to the $450 area and beyond.

Any break above the prior 2009 high of $443.25 should be met with more buying (and shorts covering), particularly on the good news that if Google does cease operating in China, then Baidu.com would be the only major search engine to service the Chinese population.

Continue watching this move and for updates on how the story plays out in the coming days/weeks.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

4 Comments

4 Responses to “BIDU: What a Difference a Day Makes”

  1. Bob Says:

    Wow… The timing of this announcement couldn't have been more favorable for BIDU. Price seemed to have hit a tough level of overhead resistance and momentum looked to be waining. A slide off the edge seemed, oh so very near.

    It will be interesting to see if this news event will be just a momentary blip effecting price or whether there will be reall follow thru with buyer's taking it to another higher level. A break above the highs on volume will be telling!

  2. Accionistas de Baidu deberán agradecer al Gobierno Chino y a Google « Sector Gawed Says:

    […] hizo que las acciones de Baidu despegaran y rebotaran de un soporte semanal. La explicación entera está en el respetado blog de Afraidtotrade de mi amigo […]

  3. tacomuncher Says:

    I'm not a stockbroker, by any means, but seems to me this is an easy bet. SHORT Baidu. When Google doesn't pull out of China, which I doubt it will, BIDU will give up the last 2 days gains. Easy money and pretty much an odds on bet.

  4. tacomuncher Says:

    I'm not a stockbroker, by any means, but seems to me this is an easy bet. SHORT Baidu. When Google doesn't pull out of China, which I doubt it will, BIDU will give up the last 2 days gains. Easy money and pretty much an odds on bet.