This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.
Source: unsplash.com
After nearly 2 years of bearishness in the Chinese stock market, and tons of uncertainty on Chinese companies that are listed in the US, things are starting to look bullish once again.
The Chinese stock market has surged around 43% (numbers derived from the iShares MSCI China ETF as a proxy).
And this is after a long awaited pullback from late Jan 2023 to end Feb 2023.
As the value of the iShares MSCI China ETF rises once more, the bulk of Chinese stocks that are listed in the US could stand to rise alongside.
Out of the hundreds of Chinese stocks listed in the US, this stock caught my eye: Baidu.
Shall we dig into this stock together?
Brief History of Baidu
Source: ir.baidu.com/financial-reports
Baidu is a technology company founded in 2000.
The company provides many internet services, which can be easily summarized as the Google of China.
Some of Baidu’s services provided include search, maps, news, and internet TV.
Having this understanding, let’s dig into its business model and financials to find out if the company is financially strong.
Business Model and Financials
Source: tradingview.com
Looking at the chart above, you can see that Baidu’s total revenue (the bar in blue) has been growing relentlessly. The only exception was in 2020 and 2022 where its total revenue dipped slightly.
Its net income (the bar in red) has been much more unpredictable.
After growing in 2017 and 2018, its net income shrunk by 93% in 2019, only for it to explode 1,031% in 2020.
Eventually, its net income declined 50% and 17% in 2021 and 2022 respectively.
Though such volatility isn’t the best of scenarios, it isn’t a deal breaker. This is because price matters a lot more when it comes to trading stocks.
Baidu is still fundamentally strong as there’s not much competition in China for its internet services.
Baidu is the world’s 6th largest search engine, and makes money from advertising, apps, and more.
So, shall we move on to look at the price chart of Baidu, determining if the opportunity to position trade its shares is here?
Technical Analysis on Baidu (NASDAQ: BIDU)
Here’s the chart of Baidu.
What can you observe?
Yes, there are no technical tools such as support and resistance, trendlines, and moving averages.
Simplicity is best to help you focus, not overcomplicating things.
Here, you can also see that there’s a green arrow under Baidu’s latest candle. This arrow indicates a new uptrend that’s formed.
Does this mean that you should rush to buy its shares now for a position trade?
This is where the Trend Impulse Factor comes to play.
You’ll want its bar to be dark green in colour as that’d indicate sustained momentum, allowing you to profit more.
And yes! The Trend Impulse Factor bar is dark green in colour!
This means that the shares of Baidu are ripe for a position trade.
Conclusion
Source: baidu.com
Baidu is 22 years old and enjoys a huge market share, especially in China.
With the wide range of Internet service it provides and network effect it enjoys, the shares of Baidu cannot be ignored.
Its price chart looks promising, with a green arrow under its latest candle, and the bar of its Trend Impulse Factor in dark green.
This is a strong reason for an entry because both the green arrow and Trend Impulse Factor indicator have been tested and proven. They form the TradersGPS (TGPS) system to help you decipher if a stock is a cut above its peers. You won’t have to feel in the dark and make wild guesses.
If you’re struggling to make money from the market, just do this ONE thing in 2023:
If you’re like most people, you probably think that building a profitable side income stream from the stock market is something that is extremely difficult to achieve, and time-consuming as well.
And you probably know that one friend or relative who has lost a lot of hard-earned money to the market despite being ‘experienced’.
And especially since 2022 was a time when we saw many people in the red, bag-holding 20-80% losses…
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Stocks that have very bad set-ups, price movement, and in general just a low probability of moving in the direction you wish for.
In fact, this process of picking the right stocks is a crucial step that most people don’t even think about.
Ask yourself this, what is your current process for knowing what stocks to buy?
Companies that you like such as TSLA, META, AAPL etc..?
Stocks that your friends tell you to buy?
Stocks that you read about in financial news, blogs or Youtube videos?
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If you have done any one of the above, you are making a dangerous mistake and that has to change.
Knowing how to pick strong stocks with the highest profit potential using a proper proven strategy is half the battle won.
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That’s how exactly I was able to still execute 20-40% and higher trades last year when the entire market was down.
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