Baidu July3-China down after 2 days up. Baidu longs hope support at 88 shorts see breaking 82
Good morning Baidu longs. The slide for Baidu will probably continue into the third day, primarily, in my opinion due to Chinese hard landing fears. The shorts will undoubtedly take advantage here to fear monger.Rumours abound that Qihoo has bought Sogou. The momentum stopped Monday. Will we return to test the lows of $82. A hold above 88 today will inspire the longs. Many critics believe that we will test 82, I will continue to be long and await the latest results from Baidu. Any hint of a surprise and our patience will be rewarded. I’m sure that you agree with me “it’s time for good news”. Have we hit the bottom for Chinese stocks? Last night China was down .6%, HK down 2.5% and SP futures are down 5 pts pre mkt. Volatility will continue. Keep strong in spite of the negativity. Recent negatives: China slowing,VIE's, banks, margin pressure, high R&D, predictions of 70's by Maxim, and Qihu pumps etc. have been hounding Baidu and benefiting the competition: On the positive front: BNP Paribas started coverage with a buy, Baidu-Ford agreement, Qihoo 360 search peaked, video begins to take shape, positive earning leaks. The ride will be bumpy but I think the worst is over. Good luck longs, cheers to a positive surprise for Baidu's quarterly earnings...then the fun begins after a year of agony. Have a great 4th of July.
Just one more quick note, I observe that many here seem to track Qihu stock price against Bidu. While certainly, this is a gauge of market confidence, I don't think that it reflects share of search. The search market in China still isn't mature. I expect next earnings announcement to clear things a bit.
Finally, I've heard peeps from colleagues in China about Qihu going to be called out for questionable business practices. This isn't insider info -- it's the word on the street corroborated by commentary in a Cantonese-language journal (as reported to me) . Keep a lookout for developments on this the next few weeks.
Wishing all a peaceful and happy holiday. I'll be back on Monday.
Just a quick clarification -- I would see any QIHU dip as a buying opp. (There's room for both BIDU and QIHU, and though I'm on the sidelines now, BIDU has a bright long-term future.)
That's it. Happy 4th