Google, Baidu Stock Price Slip Reflects Uncertainty in the Internet Sector

Last Friday's rumor of Microsoft (MSFT) making a buyout bid for Yahoo! (YHOO) was greeted with excitement, as many Internet companies advanced.

But, as the rumor faded as quickly as it arose, the Internet sector took a hit yesterday. Big names such as Amazon (AMZN), Ebay (EBAY), Google (GOOG), and Baidu.com (BIDU) all slipped.

This uncertainty of a possible merger between MSFT and YHOO is perhaps most disturbing for Google's investors.

As analysts mull over the possibility with skepticism and what it would mean if it does happen, Google's stock price reflects that indecision.

GOOG has been fighting to stay above its 30-day MA for several days. Yesterday, it, once again, closed below the 30-day MA. Its MACD also continues to slide.

Baidu.com, seen by many as Google's Chinese counterpart, did not fair well yesterday, either. It attempted to break above 130, but, instead, closed down more than $1 at $125.93.

In my previous article, I pointed out the importance of this 130 level.

With this MSFT/YHOO merger uncertainty, it is perhaps better to stay on the sideline for a bit. It would be prudent to at least wait for new catalysts that may drive the markets, such as the Feds meeting on Wednesday.