Baidu Inc. (NASDAQ: BIDU) Shares lost ground on Thursday amid tensions between China and major Western countries over human rights issues. Could this be weighing on the market?
Baidu’s shares ended the session at $ 204.57, down 14.47%. 
Analysis of Baidu’s daily chart: The stock appears to be forming what technical traders might call a “head and shoulders” pattern.
A head and shoulders pattern is considered a bearish reversal pattern, although it may not do so.
The pattern occurs when the stock goes up and makes a high, consolidates and starts making a new high, falls and jumps near the support before going up towards the initial high and eventually sells below the initial support.
The stock showed support previously close to the $ 220 level, which has struggled to cross below. This is a key area on the chart, possibly confirming the head and shoulders pattern.
Although the stock may be forming a head and shoulders pattern, it is trading above the 200-day moving average (blue), indicating that the stock’s sentiment still suggests it is up.
This is a potential area where the action may find support in the future.
Bulls would like to see the stock break above the potential resistance line that the standard brings. This can invalidate the pattern and cause the stock to start moving upwards, above the support.
The bears would like to see the stock close below the $ 220 level and have a consolidation period. This can cause the stock to see an even stronger movement towards the downside. This move could bring the price down close to the 200-day moving average before being able to find support again.
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