Baidu (BIDU) chart update

BIDU price gained over 1000% in 700 days from Dec 2008 to Nov 2010, then after about 2 months of consolidation, it is resolving to the downside.  The chart below was as of 12pm today, it shows that Baidu (BIDU) dipped below the 2 month upward support line (blue dash line). 2 additional up trend lines will provide potential support in the near and intermediate future: the red line at around $95 as of now, if red line is taken out by sellers, the green line will provide support at around $70. 

If we look at Google (GOOG) between 2004 and 2006, another leading search engine stock, its price increased almost 400% from August 2004 to Jan 2006, then it corrected 30% in a matter of 1.5 months before resuming its up trend.  The correction brought GOOG back to the blue trend line which increases $50 every 3.5 months.  In comparison, BIDU's green trend line increases $10 every 3.5 months, and its red trend line increases $10 every 2 months. 

To provide longer term reference using GOOG's history, the chart below shows GOOG's price between Jan 2006 and Dec 2007.  After the 30% correction, GOOG price spent another 400 days moving up along its blue trend line before the final leg up from Aug 2007 to Nov 2007 which deviated from the blue trend line.

GOOG's price between Aug 2004 and Aug. 2007

So using GOOG's history as a reference, BIDU's recent peak is not the end of its bull run, but rather an intermediate one.  So the question is which trend line will hold in this correction?  If the red trend line will hold, it means that when the correction is over, BIDU price will increase $60 to at least $155 level in a year which is not entirely impossible.  However, BIDU's P/E ratio is kind of high at 83.  GOOG's early 2006 correction marked the start of GOOG's P/E ratio drop, before the correction it's at 96, 12 months after, it's in 30's.  If we expect the similar things to happen on BIDU, then the more likely trend line to hold is the green one rather than the red one.  But the on-going price actions should be focused on as the major clue.

Update: Ouch, BIDU closed today at $100.19, it dropped over 5% in 4 hours of afternoon trading.

Google (GOOG), Baidu (BIDU), Microsoft (MSFT) Chart Analysis

Google Inc. is breaking out the resistance dating back to early 2010 to the upside, the correction on GOOG seems to be over in early July when it retraced 50% of the gain.  As I write, GOOG rises 9% AH on positive Q3 earning news.  Technical speaking, GOOG could rise to 820 by August next year.

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Baidu.com Inc. is forming a a triangle, considering that Q3 earning release dated on 10/18, this triangle will be broken out on that date either to the upside or the downside.  The odds favors that BIDU will break out to the upside.

 

Microsoft Corp. is breaking out to the upside from 4 month triangle, in the short term, more upside should come in the intermediate term.