Baidu is trading in a bullish trend and several arguments are in favor of its continuation on this direction.

The Chinese internet search engine shows solid fundamentals. It has recently published third quarter results that underline its strong profitability: revenue rose 52% over a year earlier while net profit hiked up by 27%. It has attractive valuation levels and its EPS is expected to increase significantly from USD 29.9 in 2013 to USD 39.2 for the current year.

Technical patterns are in the green: prices are up for several months. The stock has recently crossed its USD 228.40 short term resistance. Prices are following an upward trend line, supported by the moving averages oriented up on both daily and weekly data. Thus, this movement is likely to continue in the coming trading sessions and should help the security to reach new high levels.

For reasons exposed above, investors could benefit from the upward trend on Baidu shares by opening long positions. A first target could be set at the USD 260 on the trendline. The return under USD 228.40 would invalidate the recovery scenario and trigger the stop-loss order.