BIDU Pops On Earnings But Faces Cyclical Headwinds
Baidu (BIDU) reported earnings of $2.29 per share and revenue of $3.6 billion, which beat expectations of $2.05 per share and $3.4 billion. Analysts from Daiwa Capital and Wells Fargo upgraded the stock to outperform.
BIDU was up 5% on the news, jumping $16 from $221 to $237. However, we think the stock may face headwinds in the medium term. Using cycle analysis, the technical patterns suggest another drop, potentially below $210. Weakness in Asian markets, as well as a stronger Yen, may also be factors.
The market cycles on the chart below are designated by the black semicircles at the bottom of the chart.
BIDU Chart (Weekly Bars)
(Click on image to enlarge)
Disclaimer: So many commentators talk about a stock market crash, bust or boom just to make it exciting. Slim looks at things very differently, applying his unique cycle analysis to nearly 400 widely ...
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