Date: September 27, 2024
Broker: CGS International Securities
Company Overview
Baidu Inc (9888) operates an internet search engine and offers a variety of services, including algorithmic search, enterprise search, news, MP3 and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally, establishing itself as a major player in the digital space.
Recent Technical Performance
Baidu’s stock has shown signs of a potential bullish reversal, breaking out of a larger falling wedge pattern with an increase in volume, signaling an end to its one-year downtrend. This breakout above the psychological level of HK$90.00 was confirmed by a smaller double bottom formation between August 7 and September 16, 2024.
Entry and Exit Points
- Last Price: HK$95.75
- Entry Prices: HK$95.75, HK$87.60, HK$80.85
- Support Levels:
- Support 1: HK$87.75
- Support 2: HK$78.30
- Stop Loss: HK$75.86
- Resistance Levels:
- Resistance 1: HK$99.75
- Resistance 2: HK$121.50
Target Prices
Baidu’s stock offers promising short-term and long-term price targets:
- Target 1: HK$110.00
- Target 2: HK$120.90
- Target 3: HK$135.50
- Target 4: HK$162.00
Traders are advised to shift their stop-loss to break-even once the stock reaches the first target price of HK$110.00.
Technical Indicators
- Rate of Change: The short-term rate of change is rising above the zero line, accompanied by a bullish divergence, confirming the reversal of the uptrend.
- Directional Movement Index: Signals a resurgence in bullish strength.
- Stochastic Oscillator: The mid-term stochastic oscillator indicates an oversold crossover, while the long-term MACD histogram shows a positive trend.
- Volume: Trading volume has increased steadily over the past 10 days, supporting the upward price movement.
Analyst Recommendations
The broker, CGS International, recommends accumulating Baidu’s stock at the entry prices of HK$95.75, HK$87.60, or HK$80.85 with a stop loss set at HK$75.86. With strong bullish technical indicators, Baidu is expected to achieve significant price appreciation, offering both short and long-term profit opportunities.
