ChartWatch: BIDU May Decline to $100

On April 24, management from Baidu (NASDAQ: BIDU) reported disappointing first-quarter results. The shares of this Chinese internet dominator had already fallen from $152.50 to $136 before earnings were released. After earnings, the stock initially declined to as low as $130.

The shares only added to their retreat as the market pulled back in May. BIDU stock now trades near $119, and the Chinese version of Google (NASDAQ: GOOG) may have further left to go.

I expect the $125 level (horizontal blue line) to be formidable resistance ($122.50 has already proven to be strong near-term resistance). Bearish traders can position themselves short with a stop loss placed just above $125. Any additional move below $117 (diagonal blue line) is confirmation that at least another 7.5% decline is to be expected.

Equities mentioned in this article: BIDU