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Baidu Stock (BIDU) Ichimoku Cloud Analysis

By 12/05/2019 No Comments


Is this the lowest price to buy Baidu stock (Bidu)? Or could it drop even further down? Even if it drops further, is Baidu stock a good investment?  Today I’m using the Ichimoku cloud analysis and my Invest Diva Diamond Analysis (IDDA) to develop an investment strategy for this Chinese stock.

 

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I look at the markets based on my signature Invest Diva Diamond Analysis (IDDA) and combine it with the Ichimoku Kinko Hyo strategy development technique including indications from the Ichimoku cloud. The IDDA looks at investment strategies from 5 points: technicals, fundamentals, sentiment, capital, and overall.

About Baidu Stock (Bidu)

Baidu is the largest Internet search engine in China with over 70% of mobile traffic share in the search market.

The Chinses firm generates 86% of revenue from online marketing services and the rest from other segments.  What gets me most excited about Baidu is that it’s a technology-driven company and has been investing in AI technology. It even invests heavily autonomously driven cars which are among the hottest of the future tech.

In the near term, Baidu will invest heavily in its mobile business in terms of sales and marketing, and traffic acquisition. While meaningful monetization is uncertain, analysts expect Baidu to increase or maintain its research and development expenditure, which is at 17% of sales in the first quarter of 2019.

 

Baidu Stock Fundamentals

Here are some of the bullish and bearish justifications for the Baidu stock.

 On the positive note, Baidu sits on a cash pile of over CNY 100 billion. This gives the Chinese firm enormous powder to invest in technology, particularly in AI.

It can even use its loads of cash merger and acquisition opportunities to grow even bigger.

On one negative note, Baidu has many competitors in the field. Alibaba, Tencent, and other vertical Internet service providers are competing in terms of advertising budgets.

The fierce competition could result in slow growth in revenue for Baidu.

 

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Baidu Stock Ichimoku Analysis

The Baidu stock price broke above the daily Ichimoku cloud end of October 2019. Ichimoku Kinko Hyo strategy suggests we could see a temporary pullback towards the upper band of the cloud before further gains in the medium term. However, the pair has not yet completed the long-term double top bearish reversal chart pattern which suggests the Baidu stock price could drop to as low as $42.

Baidu Stock Daily Chart

Baidu Stock (Bidu)
Ichimoku Cloud Analysis – Invest Diva Kiana Danial

On the other hand, we also have a Saucer Bottom chart pattern forming on the daily chart.

Watch my Ichimoku cloud analysis for the Baidu stock in 2020 to see how I bring all points of the IDDA together.

What are your thoughts on the Baidu stock? Do you think this is the lowest price it could fall in the long-term? Would you consider buying the Baidu stock now, or if it drops lower?

 

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Disclaimer Trading in the financial markets involves a risk of loss and you should only trade the money you can afford to lose.

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In my book, Ichimoku Secrets, I explain how this could be an interesting buying opportunity provided you’re willing to take the risk. For more on Ichimoku strategy development, don’t forget to grab the PDF version of my book, Ichimoku Secrets.

 

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    You should only invest the money you can afford to lose.

    Invest Diva (KPHR Capital, LLC) and Kiana Danial are NOT a financial advisor. Nothing said on investdiva.com by Kiana Danial or other contributors is meant to be a recommendation to buy or sell any financial instrument.