Baidu's most recent trend suggests a bearish bias. One trading opportunity on Baidu is a Bear Call Spread using a strike $138.00 short call and a strike $143.00 long call offers a potential 33.33% return on risk over the next 21 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $138.00 by expiration. The full premium credit of $1.25 would be kept by the premium seller. The risk of $3.75 would be incurred if the stock rose above the $143.00 long call strike price.
The 5-day moving average is moving down which suggests that the short-term momentum for Baidu is bearish and the probability of a decline in share price is higher if the stock starts trending.
The 20-day moving average is moving down which suggests that the medium-term momentum for Baidu is bearish.
The RSI indicator is at 34.18 level which suggests that the stock is neither overbought nor oversold at this time.
To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here
LATEST NEWS for Baidu
BofA Lifts Baidu Estimates On Ad Recovery
Mon, 23 Nov 2020 15:58:46 +0000
Baidu Inc's (NASDAQ: BIDU) ad business appears to be in a gradual recovery mode, driven by a higher proportion of in-app sales, according to BofA Securities.The Baidu Analyst: Eddie Leung maintained a Buy rating on Baidu and raised the price target from $175 to $195.The Baidu Thesis: Although travel, online finance and property ads remain under pressure, there has been a rebound in ad spending in the health care, education, auto, lifestyle and software industries, Leung said in a note.The Mobile Baidu app, which now accounts for more than 50% of ad sales, is a driver of core sales growth “thanks to double-digit traffic growth and more video ads that lift the average eCPM,” the analyst said. “New initiatives are still in an investment stage. Cloud and AD (autonomous driving) are adding use cases such as bank clients and gov't initiatives in smart transportation and robot taxis,” he said. BofA raised the earnings estimate for 2020 from $36.50 per share to $67.83 per share to reflect higher gains and margins, and the estimates for 2021 and 2022 from $52.85 per share to $60.11 per share and from $56.85 per share to $65.96 per share, respectively, to reflect streaming sales and ad recovery.BIDU Price Action: Shares of Baidu were down 2.08% at $133.28 at last check Monday. Latest Ratings for BIDU DateFirmActionFromTo Nov 2020KeyBancMaintainsOverweight Nov 2020BarclaysUpgradesEqual-WeightOverweight Oct 2020KeyBancMaintainsOverweight View More Analyst Ratings for BIDU View the Latest Analyst RatingsSee more from Benzinga * Click here for options trades from Benzinga * KeyBanc Upgrades Cleveland-Cliffs On Opportunities Ahead * Spirit AeroSystems Analyst Turns Bullish, Sees ‘Broader Aerospace Recovery'(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Analyzing Baidu's Unusual Options Activity
Mon, 23 Nov 2020 15:39:32 +0000
Baidu (NASDAQ: BIDU) shares experienced unusual options activity on Monday. The stock price moved down to $133.65 following the option alert. * Sentiment: BEARISH * Option Type: TRADE * Trade Type: CALL * Expiration Date: 2020-12-31 * Strike Price: $140.00 * Volume: 545 * Open Interest: 33Three Ways Options Activity Is ‘Unusual'One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. The volume of options activity refers to the number of contracts traded over a given time period. The number of unsettled contracts that have been traded, but not yet closed, is called open interest. These contracts are not yet closed because a buyer has not purchased the contract, or a seller has not sold it.Another indicator of unusual options activity is the trading of a contract with an expiration date in the distant future. Additional time until a contract expires generally increases the potential for it to grow its time value and reach its strike price. It is important to consider time value because it represents the difference between the strike price and the value of the underlying asset.”Out of the money” contracts are unusual because they are purchased with a strike price far from the underlying asset price. “Out of the money” occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future.Understanding Sentiment Options are “bullish” when a call is purchased at/near ask price or a put is sold at/near bid price. Options are “bearish” when a call is sold at/near bid price or a put is bought at/near ask price.These observations are made without knowing the investor's true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.Trading Options With These Strategies Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.For more information to understand options alerts, visit https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alertsSee more from Benzinga * Click here for options trades from Benzinga * Recap: Baidu Q3 Earnings * A Look Into Baidu's Price Over Earnings(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Baidu is Poised to Shoot Nearly 40% Higher, Says Analyst
Sat, 21 Nov 2020 15:58:21 +0000
A longtime bull raises his price target on the Chinese stock in the wake of its latest quarterly results.
Is Baidu (BIDU) Stock Outpacing Its Computer and Technology Peers This Year?
Fri, 20 Nov 2020 16:30:04 +0000
Is (BIDU) Outperforming Other Computer and Technology Stocks This Year?
China’s Joyy Rises 17% After Contesting Muddy Waters Report
Fri, 20 Nov 2020 00:01:09 +0000
(Bloomberg) — The stock of Joyy Inc. surged after the Chinese livestreaming video giant disputed allegations of fraud by short seller Muddy Waters, saying its analysis showed a fundamental misunderstanding about the fledgling industry.Shares rose 17% in U.S. trading Thursday, the largest gain in three years. They recovered some of the 26% selloff in the previous session that marked its biggest single-day decline.Joyy said Muddy Waters’s 71-page report contained “numerous errors, unsubstantiated statements, and misleading conclusions” and showed its “lack of a basic understanding of the live streaming industry,” which the company helped turn into one of the fastest-growing segments of the world’s largest internet market. Joyy also pointed to a $300 million dividend program it announced in August as evidence that it is able to generate — and distribute to shareholders — real cash, including $25 million paid out in the third quarter.“To conclusively refute the report’s false allegation regarding the authenticity of JOYY’s profit figures, the Company is open to cash verification and diligence to be conducted by competent third-party advisers,” the company said in its statement.Just days before the short seller report, Joyy had announced plans to sell its YY Chinese business to search giant Baidu Inc. for $3.6 billion. The allegations have raised doubts about the deal, which is aimed at helping Baidu catch up in the competitive arena of online entertainment after a late start in live-streaming video.Muddy Waters, which had called YY a “fraud tech company” in its initial report, quickly responded to Joyy’s rebuttal. It issued a seven-question explainer of its allegations, including detailed instructions for how to review its research.Muddy Waters Research founder Carson Block earlier said Joyy’s livestreaming service YY is “guilty of bot forming, creating fake transactions and having fake users.” After a year-long investigation, the firm alleged in the report evidence of revenue inflation: livestreamers who got paid during long periods of absence or inactivity; mis-matches with local credit reports it obtained; and payments originating from company servers. Muddy Waters also said it holds a short position in Joyy, meaning the firm will benefit financially when the shares drop.The tactics outlined in Muddy Waters’s report aren’t intended to inflate revenue but to juice popularity among users, said Ke Yan, a Singapore-based analyst with DZT Research. And the research firm may be mis-judging how common the practice was of initially using bots to generate interest, said Chen Da, executive director at Anlan Capital. It’s customary to try and goose numbers for livestreams in the hope they draw in real users who then contribute actual money, he said.Livestreaming peers Momo Inc. and Douyu International Holdings Ltd. operate similar business models. Momo rose 1.9% in New York, while Douyu stood largely unchanged.“You can’t really apply the research methods used to collect fraudulent evidence against real-economy or manufacturing firms to internet firms,” Chen said. Their “business model does pay off and there is real cash flow brought in after the fakes ‘get the ball rolling’.”Read more: Baidu to Buy YY for $3.6 Billion to Get Into Chinese Live VideoWhat Bloomberg Intelligence SaysJoyy may have to spend significant time and resources to refute research firm Muddy Waters’ allegations of fraud, which may be difficult to disprove quickly. This may involve internal reviews with independent committees and external advisors. In the meantime, the doubt cast into investors’ minds could be an overhang and there may be uncertainty about the completion of the pending deal to sell YY Live to Baidu.- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.With YY, Baidu was supposed to get a $1.8 billion business with 4 million paying users who splurge on virtual gifts to tip their favorite performers. The acquisition marked the search engine giant’s biggest effort to diversify revenue streams beyond advertising and tap consumer spending. Once the runaway leader in desktop search, Baidu is trying to adapt its business to the mobile era but losing ground piecemeal to up-and-comers such as ByteDance and Kuaishou.To compete for users and advertisers, Baidu’s core search app is morphing into a platform hosting a wide array of content from articles to videos, not unlike Tencent Holdings Ltd.’s WeChat. Its Netflix-style iQiyi Inc. — – whose shares plunged in April after another short seller’s report — is also going head-to-head with services run by Tencent and Alibaba Group Holding Ltd.Started in 2005 as a chat tool for gamers, YY was among the pioneers of a way to monetize livestreaming by taking a cut of virtual gifts bestowed by fans. In 2014, its parent launched Twitch-style Huya Inc. using the same model. That unit was later spun off and is now in the middle of merging with DouYu International Holdings Ltd. to create a $10 billion game-streaming giant controlled by Tencent.YY itself is now losing appeal to hotter formats like video-streaming platform Bilibili Inc. and ByteDance Ltd.’s Douyin, the Chinese twin of TikTok. YY’s paying users actually declined 4.7% in the September quarter.Read more: Baidu-Backed iQiyi Tumbles After Disclosing SEC Probe of RecordsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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