Why would anybody short BIDU here? Fundamentals are good. China economy will grow. Baidu has substantial marketshare, and even better marketshare on mobile. QiHoo marketshare is primarily due to its adware, and in the long term, I would think that adware will lose to a high quality product like Baidu. A month ago I visited about 20 vendors in China, and every single person I talked to uses Baidu (much like every person I talk to in the USA uses google). What is the near or long term negativity coming from? Just charters and traders that see a temporary weakness? I am certain that 5 years from now Baidu will be trading much higher.
Agreed that technically it could bounce here, but techincals are short term and I am a long term buyer, so I don't watch short term movements too much.
If the concern is regarding the transition from dekstop to mobile, wouldn't google shares be falling due to the same concerns? Baidu reported a triple digit percent growth in mobile which is much better than google's mobile growth? Baidu has also publicly said that it will grow thorough acquisitions if necessary, so assuming that their mobile initiative isn't very successful, they could acquire their way into the business?
Also, I am a big believer that all ships rise in a rising tide. If China's economy continues to grow, most players will experience growth unless they have an inferior product. Even though many people are moving to mobile, there will continue to be desktop growth as can be seen in Lenovo's growth numbers.