Bye, Bye, Baidu

China's stockmarket crash coupled with mixed earnings results put pressure on Baidu (BIDU). The company reported profit for the second quarter of 3.66 billion yuan ($591 million), up slightly from 3.55 billion yuan in the same quarter a year earlier. EPS stands at $1,81, which is below analysts' estimate of $1,84. Baidu's revenues rose 38 percent from a year earlier to 16.57 billion yuan, which is in line with expectations. The guidance for Q3 is below consensus.

Baidu ended the formal trading day down 4.16%. The sell-off continued in after-market trading. We expect more selling pressure to come. There's a reversal pattern on the weekly chart, and the trend is clearly down. 167 area is seen as an appropriate target.