Chinese internet giant and Nasdaq 100 component Baidu, Inc. reports fourth quarter earnings after the close on Feb. 13, with shareholders growing nervous that the most recent failure to mount 2014 resistance above $250 could signal a major top. The stock is now trading under the 200-day exponential moving average (EMA) for the first time since June 2017, indicating that bears have taken firm control since the most recent uptick ended in mid-January.
Chinese stocks turned sharply higher after the 2016 presidential election, lifting the iShares China Large Cap ETF into 2015 resistance at the start of 2018. The ETF has dropped nearly eight points in the past two weeks, matching Baidu’s bearish tape, suggesting that the group has entered a steep correction or intermediate downtrend. Similar reversals across the emerging marketuniverse have intensified this bearish feedback loop, telling positioned players to take defensive measures as soon as possible. (See also: Emerging Market Funds May Have Topped Out.)
Baidu stock has dropped more than 50 points since failing to break out above 2014 resistance. matching broad Asian weakness. …read more
Read more here: Baidu Weakness Could Signal China Top
Category: BIDU, FXI