Recently, I have posted about the upside technical breakout for Alibaba (Code: BABA) (here). That stock has since rallied from US$84 to US$104. There is nothing much to write home about Tencent (Code: TCTZF) since it has been rising since its listing.
Today, I would like to highlight about the promising technical set-up for Baidu (Code: BIDU). From the weekly chart below, you can see the following:
1. BIDU is now poised to test its intermediate downtrend line at US$190.
2. Its RSI has broken above the downtrend line while its +DMI is above the –DMI. (Both are precursors to a potential breakout of the price downtrend line.)
3. ADX has yet to hook up nor climb above the 20 mark (No sign of uptrend momentum!)
4. MACD is still below the zero line (No uptrend yet!)
I think it is possible that the first test of the downtrend line will be unsuccessful. If that happens, the share price may drop back to the 20 & 30-week EMA line at US$172-173. If you must get in cheap & early, this is one level that you can consider. However, you want to conserve your fund and you are okay with buying a bit higher and surer, then you should aim to get in when the price breaks above US$190-195. As always, you have exercised careful discretion in all your trading. Good luck!
Chart 1: BIDU's weekly chart as at Sep 6, 2016 (Source: Stockcharts.com)
Chart 2: BIDU's monthly chart as at Sep 6, 2016 (Source: Nasdaq.com)
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