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Baidu (BIDU) Falls to a Key Support Area for the Bullish Mode

Baidu $BIDU signaled a bullish continuation outlook when price broke sharply above $275 last week. Then as price retreated, we suggested looking at the $240 area, and considering buying the dip. Price indeed retreated back to this level, but the sharpness of the fall suggests we should probably wait to see if price does stall here around $240, because otherwise, we could be looking at a retreat back to $210. 

BIDU Daily Chart

(click to enlarge)

False Breakout?
- BIDU's sharp retreat suggests that the market is no longer looking at the bullish breakout.
- The dominant price action now is a bearish swing.
- The RSI is holding above 40, which suggests maintenance of the prevailing bullish momentum.
- Also, price is right around $240, which is the middle of the consolidation. 
- If price does hold above $240 this week, then we can say that BIDU held its bullish outlook.
- Otherwise, a break below 240 would suggest a bearish outlook towards at least $210. The fact that the breakout was a false one could translate into a bearish break below the $207-$210 support area.