Monday, October 10, 2011

BIDU Has Reached Resistance, Now What?

Today the stock market rallied more than 3% mainly because European promises to help the banks.  One stock that contributed to today's rally was BIDU as it rose almost 4.5% closing at $124.54.  In fact, in its last 5 trading days, BIDU surged about 20%!  Will BIDU be able to continue this strong rally this week?

In looking at the technical analysis on three month chart, there seems to be a resistance level around $126.  In early morning trading, BIDU was able to quickly reach this resistance, but it could not break it and slowly declined throughout the day.  I would think that BIDU has met with resistance at around $126 and was not able to break it for now.  There is always a chance for this resistance to break which would allow BIDU to continue to rally into $130s range.  However, I think BIDU will start weakening from $126 and eventually go back down below $105.  Let's examine BIDU closely this week to see which direction it will take.  What is your prediction on BIDU next several weeks?  Will it continue to rally past $130 or will it be met by selling pressure?

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