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JimVanMeerten (56.35)

Baidu is a buy



November 30, 2011 – Comments (0) | RELATED TICKERS: BIDU


One of the Chinese stocks that has received a lot of attention is Baidu (BIDU) the Asian Internet search company.  The growth possibilities are almost unlimited when you consider the growth projections in Asian population and middle class.  It is almost like my grandfather's idea that if only he could find a way to just make 1 penny from every person in China he'd be set for life.  If Gramps was only around to invest in Baidu!

I like stocks having double digit growth projections for both sales and earnings and try to pick them up on market weakness and as this graph provided by Barchart shows, the stock has had a recent weakness:

Barchart technical indicators:

1 - Barchart uses various technical indicators from 7 days to 6 months to gauge the direction of a stock's momentum

2 - Recently the sell indicators are weakening

3 - 56% Barhchart technical sell signal

4 - Trend Spotter sell signal is weakening

5 - Trading below its 20, 50 and 100 day moving averages

6 - Recently 24.23% off its 1 year high

7 - Relative Strength Index 43.99% and still falling

8 - Barchart computes a technical support level at 123.14

9 - Recently traded at 125.90 with a 50 day moving average of 129.21

Summary:  Since Baidu (BIDU) has high double digit forecast in both sales and earnings there should be no doubt that the company will make money.  I do not think the P/E ratio of 3 times the market is too high. I would buy on the recent price dip and place a stop loss at either the bottom of the 14 day turtle channel, presently at 118.00 or after the stock crosses the 50 day moving average, presently at 129.21.  Always protect you gains with stop losses:

Jim Van Meerten is a Marketocracy Master

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