Baidu has triggered a bullish price pattern ahead of its earnings report after the market closes today.
The orange sloping lines on the daily chart below outline a bullish ” pennant ,” which became active this morning when BIDU broke above the top of the formation at the $155 area. The key now is whether the earnings news will support higher prices.
If the Chinese search company reports good results with solid guidance, the pattern has a chance of remaining active. In that case, the upside potential would be to the $170 area or higher.
If the news is not bullish, the first downside test would likely be to BIDU’s 10-day moving average at $148.49. A move to that level or lower would void the pattern completely.
A more extreme move to the 50-day moving average, last at $134.62, would be possible on worse-than-forecast results or very weak guidance. A downside outlier would be the 200-day moving average, last at $122.38.