Credit Suisse's analyst has been wrong so many times about Baidu.
_______________________________________________________________
Don't Panic: These Stocks (Noble, Baidu) Look Great to Buy
by: The Oxen Group March 15, 2011 | about: BIDU / NE
Today is a day to reload ... not panic.
We have two more new positions that look like great buys on a day like today that should make their way higher on any slight recovery.
Let's take a look ...
Unknown ObjectMidterm Trade: Noble Corp. (NE)
Analysis: In the past two days, Noble Corp. has received two major upgrades from JP Morgan and Stifel Nicolaus. Yet, the rough market today brought shares down once again. This trade works in a similar way to Ryland. Noble Corp. has received some very nice catalysts over the past two days, but the company has not made its move yet. That should change over the coming days as the market should begin to recover from its current drop. The stock has pulled back close to 10% from its high a couple weeks ago. Now, the drop has brought NE to a great support level, and the upgrades should bid it right back up.
The market and oil price declines somewhat have hurt Noble here at this point, but the stock is holding up very well given its upgrades and the fact that the stock has a lot of strong fundamentals. The company moved to the 46-range not only because of higher oil, but it was also because Noble is looking strong fundamentally. The company had a great earnings report, and they have been showing a lot of strength with new deals being inked.
We believe that Noble should get an upgrade boost, and that has not happened yet. What that means is it is coming, just like it did for Ryland. Noble moves a little slower than Ryland, and it is more affected by the Japan crisis. Buying it now, before it makes an even greater move upwards, seems smart to us.
The market is going to recover and these undervalued shares will make moves.
Entry: We are looking to get into Noble at 43.80 - 44.20.
Target Exits: Our first target will be for a 2% gain. Our second target will be for 3-4% gain.
Stop Loss: 2% on bottom.
Timeline: Midterm Trade.
Oxen Entry: 43.90.
Midterm Trade: Baidu Corp. (BIDU)
Analysis: When the market moves down, we BUY! And we buy strength. Strong stocks that have very positive fundamentals like Baidu are great buys on days like today. Baidu has no market connection to Japan, and they have not really been looking to expand there. Yet, the company was down 2% today on the simple fact that BIDU is in Asia and so is the Japanese crisis. In reality, the two have little correlation. Further, BIDU is a stock with a very solid fundamental backing. When it drops much, it gets bought right back up to previous levels. The great thing about this buying opportunity is that not only should BIDU fill the gap, but it looks like it may move higher.
One of my favorite technicals that signals a Buy Pick is narrowing bollinger bands. What this means is that volatility is narrowing, and stocks should pop out of the bands at some point soon once volatility comes back. At this point, Baidu has gotten beaten down a bit on the pullback (a whopping 2%). Yet, that small pullback means that on the other end, we have a rally. That rally might be just what we need to get BIDU to break out even higher.
Or ... China. The Chinese market has been in a slump for quite some time, but now, it is looking very strong. The market broke a downward trend it was in as of late, and despite today's pullbacks looks strong to make moves higher. As China makes moves higher, it will take BIDU up with it. We believe that BIDU is set up very well to recover with the market and move higher.
Grab BIDU!
Entry: We are looking to get involved at 120.50 - 121.70.
Target Exits: First target is a 2% gain. Second target will be for 3-4% gain.
Stop Loss: 3% on bottom.
Timeline: Midterm Trade.
Oxen Entry: 121.44.
Disclosure: I am long NE, BIDU.
seekingalpha.com |
