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Today’s chart is of Baidu, Inc. (BIDU) which provides Internet search services. The company offers a Chinese language search platform on its Website, Baidu.com; and a Japanese language search platform on its Website, Baidu.jp.
Ticker: Baidu, Inc. (BIDU)
What I Am Looking At:
- iShares FTSE China Index Fund (FXI) has been outperforming since broad market mid-November bottom and up 16 percent year-to-date
- BIDU is also up nearly 16 percent from early December low
- On a year-to-date basis shares are underperforming, down more than 14 percent
- Currently facing resistance with the $100 century level
- On a technical basis, shares remain in a short-term descending channel
- Declining 40-day moving average providing resistance, all other moving averages stacked and trending lower
- $110-115 resistance zone based on Volume by Price
- Short interest has risen nearly 100 percent since July and represents just over 3 percent of the float
- Nearly 9 days to cover
- The 50-day buy-to-open put/call ratio ranks in the 92nd percentile of readings taken during the past year, indicating an extreme in pessimism
- 11 out of 15 analysts rate shares a “strong buy”
Strategy: Lot of crosscurrents in BIDU as pessimism continues to build, no heavy lean as trend remains firmly down