Baidu Troubles Mount: Analyst Downgrade, Chart Failure, and Put Options

Now a late-morning analyst downgrade from Deutsche Bank is taking some steam out of the Chinese search engine giant.  At 12:05 PM EST we have Baidu shares down 5.5% at $116.05.  The stock was above $121.00up until about 11:30 and shares have yet to tick up. The trading volume is over 6.2 million shares against what is now just a 4.2 million share average daily volume.

Things have gone weak in the options trading game as well.  The $115, $120, and $125 call options expiring tomorrow saw more than 12,000 contracts combined in trading but the puts with a $110, $115, and $120 strike price have seen more than 15,000 contracts trade hands.  As a reminder, it is 10,000 contracts which equate to another 1 million shares on a fully leveraged basis.

Before the effects of that Baidu downgrade, Thomson Reuters has a consensus price target of about $169.00 on Baidu and the 52-week trading range is $99.71 to $154.15.

Keep in mind that Baidu’s 50-day moving average is $118.56 and the stock fell under the 200-day moving average of $127.65 just earlier this week.

JON C. OGG