Institutional block trading has picked up in BIDU shares over the past couple of days. At the same time trading has been slower and stagnating at times during the trading session.
These are all good signs for the Bulls that a bounce is coming. Looking at the chart since the earnings, which by the way were not as bad as the street would like us all to believe, shows that the stock has been under some major and unwarranted selling pressure. Usually this irrational selling leads to a big reversal to the upside. Similar to the 10% bounce that AAPL just enjoyed.
I do believe that we are supporting nicely higher for the second leg of the W double bottom. This would be consistent with a stock that is in a major multi year bull run, to consolidate and look for the next leg up.
China is going to start growing again, and most of the reason BIDU suffered this down slide was because of the slow down in that economy. All of this talk of competition and accounting, were all stories used by the shorts to help solidify its move to the downside.
Now we will see how the next 2-3 months will play out, and how the stories will turn more positive.
Disclosure: I am long BIDU.