At the end of August, Baidu’s (BIDU) stock price commenced a bullish rally, rising from the support level of $123.90. The stock price gained bullish momentum, hoping to break the resistance level of $156.50, but the bullish move was halted as soon as the price reached near $147.
BIDU stock price faced strong rejection from $151, which induced a negative sentiment. The bears wanted the stock price to stay below $150.
After the rejection, the BIDU stock price entered a corrective phase and started to melt. Recently, BIDU stock price formed support at $127 after printing a bearish candle for 12 consecutive trading days.
The last two candles closed bullish, above the $130 psychological level. If the bullish momentum prevails, the stock price might retest the resistance level of $147. On the other hand, if bears push the price below $130, it might melt down toward the recent support of $127.
Quarter 3 Earnings Expectations
Baidu presented an immersive quarter 2 financial report, which paints an encouraging picture, with a 15% rise in revenue to $4.7 Billion and an increase of 42% year-over-year earnings per share.
BIDU’s real catalyst is its unmatched AI prowess. The company recently launched its ChatGPT rival, Ernie Bot. Baidu has carved out a niche, integrating advanced natural language processing (NLP) tools that transform searches, offer tailored recommendations, and breathe life into intelligent chatbots.
Wallstreet expects the third quarter revenue to increase by 5.9% to $4.82 billion year over year. The earnings per share is expected to rise by 4.6% yearly to $2.47. Baidu has topped its revenue and EPS estimates in the trailing four quarters, showing strong growth.
Will BIDU Stock Price Retest the $147 Resistance Level?
The stock price has declined below 20,50,100, and 200-day exponential moving averages, suggesting bearish momentum. However, BIDU stock price has jumped after forming a support level of $127 and will soon cross the 20-day EMA if bullish momentum prevails.
The Chaikin money flow score has dropped below the 0 mark and stands at -0.20, indicating weakness in the market. The relative strength index has witnessed a slight surge and stands at 44.31, nearing the neutral mark, implying a rise in the participation of bulls in the market.
Baidu has broken the bearish streak and is now showing potential to retest the $147 level. BIDU stock price has closed above $130, which provides slight confirmation regarding a bullish move toward $140. Technical indicators also suggest active participation of bulls in the market.
Major support: $127 and $123.90
Major resistance: $147 and $156.50
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