The “Chinese Google” had one of the more impressive uptrends in the current rally, more than trebling off its bottom late last year.
Since early June price has been forming a buyable consolidation that O’Neil refers to as a Square Box. This morning price gapped over a trend line connecting the recent highs, serving as an initial buy point. It then passed an additional inflection point at $305.80 resistance. It has yet to clear its recent highs of $310.25, which represents yet a third valid buy point.
An earnings date for BIDU has not yet been confirmed but is tentatively scheduled for 7/22 PM. The company only met estimates last quarter and missed by a dime the quarter before.
But I prefer to trade what I see and what we are witnessing is a rush of institutional money into a stock that is in the process of launching another leg higher. Whether or not it succeeds depends on the market, of course, but recent action has to bolster confidence.
As we come into midday I might consider trying to buy on a constructive pullback. Alternatively a move past $310.25 might be worthy of taking a smaller position.
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Lying with Statistics: the September Jobs Report
11 years ago
We have a solid gain in this stock that reports earnings after the close. You need to judge your own risk tolerance as to holding through earnings but for ourselves would be less cauious here than on a NFLX.
ReplyDeleteThis was one of the first stocks to rush to 52 week highs in the renewed market rally and it is a liquid institutional favorite in the red hot Chinese Internet sector.
It has acted very well since breaking out, moving higher on excellent volume with volume tempering when it corrects.
BIDU achieved a greater than 20% gain from its break out point in just 9 sessions. O'Neil suggests stocks that make a quick gain of this magnitude should be held for a minimum of eight weeks provided the market remains in an uptrend.
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