Things Got Ugly With Baidu Stock Today: What's Next?

Baidu Inc. BIDU shares are trading lower Thursday, despite reporting better-than-expected second-quarter financial results. Many other Chinese stocks are trading lower as COVID-19 concerns rise once again.

Baidu was down 3.67% at $158.92 at last check Thursday.

See Also: What's Up With Baidu's Stock Today?

Baidu Daily Chart Analysis

• Shares look to have broken pattern support in what technical traders call a pennant pattern.
• The stock is trading below both the 50-day moving average (green) and the 200-day moving average (blue), indicating recent sentiment in the stock has been bearish.
• Each of these moving averages may hold as an area of resistance in the future.
• The stock pushed lower below support despite good earnings. This could hint the stock isn’t done falling.
• The Relative Strength Index (RSI) dumped lower and now sits at 21. This means there was a large number of sellers that entered the stock Thursday.

What’s Next For Baidu?

Bullish traders are looking to see the stock climb higher back into the pennant pattern. Following, bulls would like to see the stock break above pattern resistance and move higher.

Bears would like to see the stock continue to fall and see the RSI continue to fall. Bears have control of the stock and if the stock can stay below the pattern resistance they may hold control.

Image by MasterTux from Pixabay