Today’s chart of the day is Baidu, Inc. (NASDAQ: BIDU).
The stock broke out of a bullish pennant chart formation on Friday to new all-time highs on expanding volume, which is a good news/bad news scenario. It could mean the stock will keep driving higher, or the volume could be an indication of a blow-off top.
I am of the belief that it will be a true breakout, as there is no bearish divergence in the indicators and oscillators.
The key number for traders to watch is $109.34. If BIDU can break above that level, this will signal that Friday’s volume was not of the blow-off top variety.
Until the charts say otherwise, the trend in BIDU remains bullish.