Baidu (BIDU) just presented their quarterly earnings and beat the consensus nicely. The market responded accordingly and Baidu gapped up. The gap signals times of increased volatility may lie ahead.
The long-term chart shows a phenomenal growth over the last years. Bottom (pink) and top (orange) line have been the dream of a growth investor or growth trend trader.
The price line has rested for almost two years now while revenues and earnings went further up. Gauged by simple geometry the stock seems to be cheap.
Baidu has a monopoly in China with its language-specific search engine. Google decided to pull out of China for political reasons and so there is no real competitor anymore. Perhaps the reasons for Google’s retreat were more business-rooted than they admitted, as foreign companies seem to be disfavored by the Chinese government.
What about the outlook? China’s Internet growth potential is still estimated to be huge. It should be large enough to propel Baidu’s stock price to new alltime highs.
After this earnings report BIDU seems to be one more trading vehicle for our swing trading system for trend traders.
In short it goes like this:
Look for a stock with real growth potential and wait for a situation where volatility is expected to increase. One example is Baidu, as it has formed a base in a long-term trend of two years and now surprised with a strong earnings report.
From there on Scotty the autopilot takes over. Recommended is this swing trading software, which has a neural trading algorithm that beats most real neural systems – our brains. It is able to adapt to the idiosyncratic behavior of a stock and detect even patterns that are invisible to human traders. Watch their video…
There we are again. Select real growth potential with true trends and then apply a working trading system at the right spot, and you have the best method to milk the markets.