About a week ago I wrote an article noting that Baidu, Inc. (NASDAQ:BIDU) was nearing the even number at $500.00. I said it would go through the $500 even number and then it may be a good shorting/puts opportunity based on an extreme oversold stock price and technical signals. Sure enough, Monday is here and Baidu, Inc. is over $500 per share.
Baidu, Inc. is based in China and is an online search engine provider. They provide search engine results in China and have recently started in Japan. The company is generally modeled after Google Inc. (NASDAQ:GOOG)
According to my analysis, Baidu, Inc. is now in a range where a pullback is extremely likely. With the unlikely pullout of Google Inc. from China, much of the premium built in the stock may not be warranted. In fact, the stock in early 2009 hit a low of $105. Today, the stock hit a new 52 week high at $509.66. As mentioned in my article last week, the stock would be a pullback candidate using shorts or puts once it breached $500.00. Today that happened.
Here is the link to the call on BIDU a week ago for it to reach $500.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com