Post-Earnings Follow-Through: priceline.com Finds Support, Baidu Breaks Out

As the stock market gains new momentum, interesting charts are bound to appear everywhere. Priceline.com (PCLN) and Baidu (BIDU) are two of many with interesting post-earnings patterns.

I covered the post-earnings set-up on priceline.com (PCLN) on August 11th (see “Priceline Not Likely to Recover Post-Earnings Losses In the Near-Term“). PCLN never closed below the critical $560 support line and is now bouncing in picture-perfect form. The charts below show the origin of the support line and then a close-up of the recent trading action.


priceline.com returns to the point of a major breakout
priceline.com returns to the point of a major breakout


A near picture-perfect bounce from support
A near picture-perfect bounce from support

I still think that this rally will end at the looming resistance from the 200-day moving average (DMA). Then again, if the market rally continues because of expectations of an imminent recovery in Europe, then PCLN could keep zipping along to close its post-earnings gap down ahead of schedule.

Baidu (BIDU) is even more interesting because it is already up 34% in just one month as the stock recovers from a 19-month (intraday) low. BIDU showed relative weakness as it continued to sell-off past the general market’s June low. Now, with the stock gapping up post-earnings and following through in a convincing fashion, it is difficult to understand what fear so gripped the market about BIDU earlier.

BIDU broke out above its 200DMA a week and a half ago on August 6th. The stock went nowhere until today. BIDU’s 2.7% gain breaks out from the mini-consolidation pattern and brings fresh life to the stock’s post-earnings rally.


BIDU follows-through on its post-earnings rally
BIDU follows-through on its post-earnings rally

Source: FreeStockCharts.com

Of the two stocks, BIDU holds the most bullish promise. Both stocks provide very clear stop loss points, but only PCLN becomes a short below that line ($560 for PCLN, 200DMA for BIDU).

Be careful out there!

Full disclosure: no positions

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