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From the looks of things, Baidu (BIDU) is a name to avoid and for good reason. It’s one of the tech-related names that fully deserves its 100% Strong Sell rating by the Barchart Technical Opinion indicator. Tumbling nearly 11% in the trailing month will do that to you. Plus, BIDU stock happens to be one of the worst one-month percentage losers among large-capitalization securities.
Still, Baidu offers what extreme contrarians love: a relevant business that’s suffered a massive haircut. Primarily, the idea is that BIDU stock could be a possible mean-reversion candidate. With so much negativity baked into the share price, more bad news of increasing scope may be necessary to justify its descent. Theoretically, upside resistance may be limited — meaning good news could have a disproportionate impact.
