Baidu's short-term performance has been weighed down by news; a rebound is conditional on holding above 115.850.

Looking at the internet technology and software services sector, the market performance was mixed on the previous day (29th), $MEITUAN-W (03690.HK)$ up 3.55%, $BABA-W (09988.HK)$ up 3.24%, $KUAISHOU-W (01024.HK)$ up 2.93%, $TENCENT (00700.HK)$ up 1.14%, while $BIDU-SW (09888.HK)$ down 2.76%.

Technical signals showed significant divergence: Baidu’s technical indicator summary signal is “neutral,” with an RSI of 49. In contrast, Tencent and Kuaishou received a “strong buy” rating, while Meituan and Alibaba's technical signals are also “buy.” This indicates that Baidu's weak pullback occurred in an environment where the sector's overall sentiment was relatively positive and most peers had strong technical indicators. Its “neutral” signal stands in stark contrast to the prevalent “buy” or “strong buy” ratings among its peers, highlighting the market's relatively cautious stance on its short-term outlook. This also implies that for a rebound to take place, Baidu not only needs to defend key support levels but also requires a strong sector-wide atmosphere to reverse its relatively lagging technical rating.

Baidu Group-SW closed at 119.900 on the previous day, showing weakening short-term rebound momentum. The stock price remains below the 5-day, 10-day, 60-day, and 120-day moving averages, reflecting persistent overhead selling pressure. However, the closing price of 119.900 still sits above the 20-day moving average at 115.850 and the middle Bollinger Band line, indicating that it has not completely weakened, but rather is consolidating after a rebound.

The comments mainly focus on news about autonomous driving licenses, system malfunctions, whether to buy the dip after the sharp market drop, and whether the stock will face renewed selling pressure from external funds in the short term. Some investors believe the suspension of new license issuance may limit competition, which isn’t necessarily entirely negative for Baidu; however, others question the fundamentals of autonomous driving, worry about potential government penalties, and believe the stock still has downside risks.

Market sentiment is volatile and divided. Bulls argue that the news is a short-term factor, and the sharp drop presents an opportunity to enter at lower levels or add positions. Bears, however, believe that the autonomous driving business is under pressure, with unresolved technological and regulatory risks, suggesting the stock might continue to be sold off in the short term.

Common questions focus on three points:

First, whether the suspension of issuing new autonomous driving licenses is a positive or negative factor;

Second, whether it is possible to buy on the dip after a sharp decline;

Third, whether Baidu can rebound in the short term to above 122 yuan.

From a technical standpoint, 115.850 is currently the most important support level. As long as it holds steady, there are still conditions for a rebound. However, to confirm a strengthening trend, it must break back above 122.450. If it falls below 115.850, one should be mindful of the risk of testing 110.704.

At this stage, the risk-reward ratio is neutral with a cautious outlook, as news-driven fluctuations persist but technically it has not completely broken down. A more prudent strategy is to consider a rebound only if 115.850 is held, and confirm strength only upon breaking above 122.450. If 115.850 is breached, short-term defense takes priority.

Reply to some investors' views:

@股壇清泉 @股壇清泉 @股壇清泉 The news about autonomous driving licenses has pressured fundamental confidence, so the immediate focus is holding above 115.850.

@世紀大空頭支票 External selling pressure could affect short-term sentiment, while technically 115.850 remains the key support level to watch.

@All in東哥等退休 Given the high volatility at this stage, those whose mindset is affected should prioritize risk control first.

Based on the above analysis, the strategies for deployment can be divided into the following main approaches:

Key deployment: Hold above 115.850 and break above 122.450 for a short-term target of 129.766; if 115.850 is breached, then watch for a test of 110.704.

Strategy One | Rebound deployment after holding 115.850

$HSBAIDU@EC2607A.C (20356.HK)$ | Strike price 132.88 | Actual leverage 7.9x | Close to the upper side of the rebound zone, suitable for capturing initial recovery after stabilizing support

$UBBAIDU@EC2609A.C (28166.HK)$ | Strike price 140.00 | Actual leverage 5.1x | Mid out-of-the-money option, suitable for expecting a gradual rebound extension

$UBBAIDU@EC2610A.C (27686.HK)$ | Strike price 151.21 | Actual leverage 5.0x | Further out-of-the-money, suitable for deployment when anticipating an expansion in rebound potential

Strategy Two | Chasing the rebound after breaking through 122.450

$HSBAIDU@EC2607B.C (24018.HK)$ | Strike price 145.88 | Actual leverage 8.8x | Higher leverage, suitable for chasing short-term momentum after a breakout

$CTBAIDU@EC2609A.C (27915.HK)$ | Strike price 140.00 | Actual leverage 5.2x | Balanced choice, suitable for following up after confirming a breakout

$BIBAIDU@EC2610A.C (27655.HK)$ | Strike price 151.21 | Actual leverage 5.0x | Mid out-of-the-money deployment, suitable for expecting an upward move extending above 129

Strategy Three | Deployment on weakness after falling below 115.850

$UBBAIDU@EP2607A.P (20739.HK)$ | Strike price 113.78 | Actual leverage 5.1x | Close to the support level, suitable for capturing initial weakness after a breakdown

$BPBAIDU@EP2607A.P (20780.HK)$ | Strike price 115.00 | Actual leverage 6.0x | Higher leverage, suitable for amplifying returns when testing the 110 range

$UBBAIDU@EP2608A.P (18629.HK)$ ｜Strike price 88.83｜Actual leverage 5.3 times｜Further out-of-the-money, suitable for deployment when expecting a continuation of weakening trends

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Reminder: This article does not constitute any investment advice.

This article is for reference only and does not constitute any investment advice. The market data, opinions, and analysis contained herein may change at any time without prior notice. We are not responsible for any loss or damage caused by reliance on the information in this article. Technical analysis only shows whether certain technical conditions are met; a comprehensive assessment of asset performance should be conducted using additional data. Decisions to trade should not be based solely on this article. Please note that past performance is not indicative of future results.

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