Baidu Inc (US: BIDU) is now in an accumulative phase. We believe it is poised to break up higher and resume the bullish upside after technicals show strong bullish signals:

1. The formation of the inverted head and shoulder pattern has shown initial confirmation after yesterday’s candle broke above the lower boundary of the neckline resistance zone at US$169.78.
2. Prices have broken out with a breakaway gap kind of formation above the pennant formation on Monday. A bullish signal ahead.
3. Ichimoku registering an initial bullish signal especially after prices show a potential break up above the kumo and the senkou-span A is sloping up right after the kumo bullish twist.
4. MACD has formed a bullish cross and both the signal and MACD line have crossed above the zero line.

*Expected timeline of the trade is 15 weeks from the date of report issuance.

CHART LEGEND

Ichimoku Kinko Hyo

Red dotted line = 26 periods Kijun-Sen

Blue dotted line = 9 Periods Tenkan-Sen

Green Line B= 52 periods Senkou Span B

Pink Line A = 26 periods Senkou Span A

Black line = 26 periods Chikou Span. Lagging line