Baidu.com (NASDAQ: BIDU - option chain) shares are rising today after a market research firm reported that the company accounted for 74.1 % of China internet search queries in the Q1 2009, up from 72% in the fourth quarter of 2008. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BIDU.

BIDU opened this morning at $268.19. So far today the stock has hit a low of $266.80 and a high of $184.77. As of 11:40, BIDU is trading at $283.78 up $19.98 (7.6%). The chart for BIDU looks bearish and S&P gives BIDU a negative 2 STARS (out of 5) sell ranking.

With all the media buildup leading up to the Olympic Games in Beijing this past summer, just about everyone and their brother was bullish on the China/India emerging market theme.

"Chindia," as it was coined, was supposed to be the next great economic wonder.

The belief that these markets did not need American demand swept international investment circles. Forecasts of double-digit GDP growth continuing for the next several years became the mantra of emerging market funds, and Wall Street analysts got caught up in the commodity bubble, which burst a month before the Olympic torch was lit.

The widely held belief of global economists was that these two sleeping giant economies would lap America in a matter of a few years, as per all the economic extrapolations and white papers published leading up to the Summer Games.

Stocks like Baidu.com (NASDAQ: BIDU), China Mobil (NYSE: CHL), China Life (NYSE: LFC), Huaneng Power (NYSE: HNP), PetroChina (NYSE: PTR), Infosys (NASDAQ: INFY) and Reliance Industries (not listed) seemed bulletproof given the revenue and earnings models being floated by the Chindia bulls.

Analysts at Pali Research today started coverage of Baidu.com, Inc. (NASDAQ: BIDU) with a Sell rating and a $90 price target. The brokerage firm cited "short- to mid-term uncertainties," which it says outweigh current opportunities for the Chinese Internet-search titan.

Chief among those uncertainties is Baidu.com's "controversial" business model. The search engine has recently come under fire for hosting search listings paid for by unlicensed medical and pharmaceutical concerns. Last week, the company added to Wall Street's concerns by slashing its fourth-quarter revenue outlook.

Pali Research joins the majority of analysts with its downbeat opinion of Baidu.com. Zacks reports three Holds, one Sell, and one Strong Sell, compared to just two Buy or better ratings. While the shares have already shed 70.8% year-to-date, Pali's $90 price target suggests that the brokerage firm expects additional downside. This estimate represents a discount of 21.1% to the stock's closing price on Friday.

Despite BIDU's negative price action, option players remain relentlessly bullish on the shares. During the past 50 days, traders on the International Securities Exchange (ISE) and the Chicago Board Options Exchange (CBOE) have consistently purchased more calls than puts on this Internet issue.

With the shares up more than 1% in early trading today, the bullish case for BIDU looks curiously compelling. However, considering the company's cloudy fundamental outlook, it's unclear just how long the shares can rely on round-number support at $110 before succumbing to the effects of gravity once again.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

Baidu.com (NASDAQ: BIDU - option chain) shares are rising with other internet companies after internet giant Google (NASDAQ: GOOG) posted a third-quarter adjusted profit of $4.92 per share, beating analysts' estimates of $4.75 per share. This should be a small positive sign for BIDU, even though the Chinese economy has been missing since the Olympics ended. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BIDU.

BIDU opened this morning at $233.53. So far today the stock has hit a low of $222.13 and a high of $239.49. As of 12:15, BIDU is trading at $237.69, up $22.89 (10.7%). The chart for BIDU looks neutral and S&P gives BIDU a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $185 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just one month as long as BIDU is above $185 at November expiration. Baidu would have to fall by more than 22% before we would start to lose money. Learn more about this type of trade here.

BIDU hasn't been below $198 at all in the past year and has shown support around $200 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BIDU or GOOG.

Baidu.com (NASDAQ: BIDU - option chain) shares are diving today after the Wall Street Journal reported that speculation is rampant in China that the internet-search company accepted payments from dairy companies to keep negative items from appearing in its search results. BIDU admits that several dairy companies had approached the company, but says it refused all offers to screen negative news. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BIDU.

This morning, BIDU opened at $280.50. So far today the stock has hit a low of $201.15 and a high of $311.30. As of 1:05, BIDU is trading at $293.90, down $11.35 (-3.7%). The chart for BIDU looks neutral and S&P gives BIDU a 3 STARS (out of 5) hold ranking.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $360 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in 4 weeks as long as BIDU is below $360 at October expiration. Baidu would have to rise by more than 23% before we would start to lose money. Learn more about this type of trade here.

BIDU hasn't been above $360 at since May and has shown resistance around $325 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BIDU.

Minyanville's top dog, Todd Harrison, dares to ask in public what Wall Street types quietly consider in private. For more insight and ideas, visit www.Minyanville.com.

• If S&P 1340 doesn't hold, you're going to hear a lot of chatter regarding the March lows (S&P 1275) in a hurry. Be prepared. Be very prepared.
  
  
• One very savvy soothsayer, who I just got off the phone with, doesn't think we get there. He's looking for S&P 1320-ish as a long side opportunity. Just so you're hearing what I'm hearing as heck, we don't call him "As Good As It Gets" for nothing.
  
  
• Moi? Are you talking to me? You know my drill: I've got a pretty sizable ratio bet on (short crude, long oil), which I'm trading around as a function of price, along with some tertiary trading exposure, including Goldman (GS) calls.
  
  
• Speaking of taxi drivers, how long do you think it'll be before cabs are allowed to pick up multiple passengers in the Big Apple? That should help with societal acrimony!
  
  
• If you looked up "Where there's smoke, there's fire," you'd probably find a picture of Lehman Brothers (LEH)., this thing trades funky.
  
  
• I'm seeing a lot of stocks trade "wide," which is to say they're jumping around. That's a recipe for smaller size. Adapt, don't conform.
  
  
• Given the amount of typing I do on any given day, do you think I should get finger insurance?
  
  
• Baidu (BIDU) trades dry, so you see it.
  

R.P.

MAJOR PAPERS:

• Jarrett Lilien, E-Trade Financial Corporation's (NASDAQ: ETFC) president and COO, who lost out on the CEO job last month to Donald Layton, is going to resign from the online brokerage firm, the Wall Street Journal reported; Layton doesn't plan to fill the position.
• Chinese Internet search firm Baidu.com Inc (NASDAQ: BIDU) is poised for aggressive growth but must also confront a number of obstacles, according to the Wall Street Journal's "Heard in Asia," including a number of lawsuits regarding its music services and a vacancy in the CFO position.
• Alibaba Group, a Chinese Internet company , is in advanced talks with investors to finance its acquisition of Yahoo! Inc's (NASDAQ: YHOO) stake to expand its management independence, the Wall Street Journal reported.

OTHER PAPERS:

• According to inside sources, the New York Post reported that billionaire Joseph Lewis and former Bear Stearns Companies Inc (NYSE: BSC) CEO Jimmy Cayne are looking for a white knight that could surpass JPMorgan Chase & Co's (NYSE: JPM) takeover offer for Bear Lewis and Cayne have reportedly reached out to several private equity firms and overseas banks, including Barclays Plc (NYSE: BCS) and Credit Suisse Group (NYSE: CS).

WEB SITES:

• Medical supplies boss Michael Mastromarino, accused of stealing the body parts of around 1,000 corpses, has pleaded guilty to several charges in a deal with prosecutors. The BBC News reported that the Biomedical Tissue Services company shipped bones, skin and tendons to tissue-processing companies such as LifeCell Corporation (NASDAQ: LIFC) and Tutogen Medical Inc (AMEX: TTG), which are in turn facing hundreds of civil lawsuits.

Baidu.com, Inc. (NASDAQ: BIDU) shares are rising after an article in Barron's(subscription required) published Thursday evening predicted the Chinese internet sector would be quite profitable in 2008. A positive outlook from the respected publication often gives any stock a boost. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BIDU.

After hitting a one-year low of $92.80 in April, the stock hit a one-year high of $429.19 in November. BIDU opened this morning at $241.70. So far today the stock has hit a low of $240.83 and a high of $249.84. As of 12:45, BIDU is trading at $244.40, up $1.98 (0.8%). The chart for BIDU looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $210 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just two weeks as long as BIDU is above $210 at March expiration. Baidu would have to fall by more than 14% before we would start to lose money. Learn more about this type of trade here.

BIDU hasn't been below $210 since August and has shown support around $235 recently. This trade could be risky if the this momentum stock has lost its mojo, but even if that happens, this position could be protected by the support the stock might find around $230, where it has bottomed over the past month.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BIDU.

Here are a few highlights of this past week's earnings coverage from BloggingStocks:

• Abercrombie & Fitch Co. (NYSE: ANF) beat estimates on strong sales and higher profit margins.
• Baidu.com Inc. (NASDAQ: BIDU) profit soared on strong revenue from online marketing.
• Coca-Cola Co. (NYSE: KO) earnings and revenue surged in the fourth quarer.
• Dean Foods Co. (NYSE: DF) missed expectations on rising commodity costs and lower profit margins.
• Deere & Co. (NYSE: DE) posted better-than-expected profits as rising grain prices spurred demand.
• Goodyear Tire & Rubber Co. (NYSE: GT) posted solid results on cost savings and debt reduction.
• Insight Enterprises Inc. (NASDAQ: NSIT) beat expectations and raised its guidance.
• LECG (NASDAQ: XPRT) posted a net loss despite a slight increase in revenue in the fourth quarter.
• Loews Corp. (NYSE: LTR) missed estimates due to profit decline in its CNA Financial (NYSE: CNA) affiliate.
• Marsh & McLennan Inc. (NYSE: MMC) missed estimates on weakness in its insurance services business.
• Playboy Enterprises Inc. (NYSE: PLA) posted disappointing results on weakness in publishing and TV.
• Qwest Communications International Inc. (NYSE: Q) fourth-quarter and full-year results met estimates.
• Sierra Wireless Inc. (NASDAQ: SWIR) beat esimates on the launch of new product s.
• Taser International Inc. (NASDAQ: TASR) profits doubled, which was in line with expectations.
• Visteon Corp. (NYSE: VC) posted a fourth-quarter loss on restructuring costs and write-downs.
• Waste Management Inc. (NYSE: WMI) beat espectations and offered 2008 guidance.
• Wyndham Worldwide Corp. (NYSE: WYN) earnings met expectations and were buoyed by lodging revenue.
• Zoltek Companies Inc. (NASDAQ: ZOLT) missed earnings estimates due to inventory buildup.

Upcoming results to watch for include Wal-Mart (NYSE: WMT), Hewlett-Packard (NYSE: HPQ), OfficeMax (NYSE: OMX), Whole Foods (NASDAQ: WFMI), MGM Mirage (NYSE: MGM), JCPenney (NYSE: JCP), and Safeway (NYSE: SWY).

Visit AOL Money & Finance for more earnings coverage.

MAJOR PAPERS:

• Battling Baidu.com Inc (NASDAQ: BIDU) in China with little success, Google Inc (NASDAQ: GOOG) is working with a Chinese company to offer free licensed music downloads, the Wall Street Journal reported. The new service is expected to be launched in several weeks.

OTHER PAPERS:

• BHP Billiton Limited (NYSE: BHP) raised its bid for mining company Rio Tinto Plc (NYSE: RTP) to more than GBP70B. Meanwhile, the UK Times reported that Rio's new Chinese shareholder was preparing a counter bid for Rio.
• The Washington Post reported that Time Warner Inc (NYSE: TWX) CEO Jeffrey Bewkes is expected to announce a plan today to sell or spin off Time Warner Cable Inc (NYSE: TWC). Bewkes also is likely to signal plans to break up AOL in the coming year.

WEB SITES:

• Berkshire Hathaway Inc's (NYSE: BRK.A) Warren Buffett told Fox Business that he has no plans to bail out Ambac Financial Group Inc (NYSE: ABK) and MBIA Inc (NYSE: MBI).

Global expert John Christy combines Asia and technology in the latest fund recommendation in his Forbes International Investment Report.

"Our latest buy is Matthews Asian Technology Fund (MATFX), which has been added to our Global Core and Asia-Pacific Portfolios. While there's plenty of uncertainty in global markets at the outset of 2008, the tech sector and Asia's economies both look well-positioned to weather the storm.

"The Matthews Asian Technology Fund gives you the best of both worlds. With $245 million in assets, the fund has delivered annualized returns in excess of 25% over the past five years. It invests in a mixture of both large-cap and small-cap companies, with varying degrees of exposure to 'technology.'

"Some holdings, like Chinese search engine Baidu.com and the Japanese social networking site Mixi, are pure technology plays, whereas Korea's Samsung Electronics and Japan's Sony fall into the more mature camp of consumer electronics.

"Telecom is also among the fund's biggest holdings, with China Mobile and India's Bharti Airtel among the top 10 holdings. That means the fund won't always deliver eye-popping returns, but it offers a bit more protection on the downside."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

With stock markets continuing to free fall, investors should explore the option of tax-loss selling now. While harvesting losses on stocks to offset capital gains is customarily done in October and November, smart investors will realize that there is no reason not to do the same now. Over the last week, I have been working with my clients to sell their losers and realize the loss. Either they will be able to use the losses to offset gains which hopefully will come later on this year, or the losses can be rolled over for next year as well.

Those of you in former high fliers such as Baidu.com (NASDAQ: BIDU), First Solar (NASDAQ: FSLR) and Apple (NASDAQ: AAPL) who are lamenting your steep losses of the last month have no fear. By taking losses on those stocks now, you may actually profit from your losers.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has no positions in any stock mentioned as of 1/23/08

China is beginning to admit that slow growth in the U.S. would be a significant enough drag to badly damage its exports and hurt its economy. "If U.S. consumption really comes down, that's bad news for us. That will have a pretty severe impact on our exports," Zhang Tao, deputy head of the international department of the People's Bank of China, told a group including Reuters.

Any slowdown is likely to hit the Chinese stock markets hard. Despite a recent pullback, the Hang Seng Index is up over 60% in the last two years while the S&P has barely risen. The Shanghai Composite is up over 300% during that period.

Downward pressure on China shares could affect many stocks listed in the U.S. Among the most vulnerable are probably those that have risen the fastest. That would include Baidu (NASDAQ: BIDU), which is up about 130% in the last year, and China Mobile (NYSE: CHL), which is up over 70%.

If a U.S. recession hits China, the markets there may have seen their best days.

Douglas A. McIntyre is an editor at 247wallst.com

Although Google (NASDAQ: GOOG)'s Android mobile phone software platform was officially announced months ago, the global wireless industry has been mum -- or doesn't know -- when Google's platform will be available for consumers. Which global wireless markets will be the first to even see a device powered by Google's Android platform?

Would it make sense for Google to release this platform in a market where consumers do most web surfing on a mobile device instead of a PC? Possibly -- although releasing Android in a market that has gadget-obsessed consumers may also be a decent choice. How about releasing the platform to a wireless carrier in a country where you're trying to take internet search engine market share away from a competitor?

Not only do hundreds of millions of Chinese wireless customers exist (more than the entire U.S. population), but many of them interact with the web on their mobile phones. Also, Google has made it known that it wants to become the largest search engine provider in the world's most populous country. That spot is now held by Baidu.com, which has managed to beat Google in China to this point. But Google -- ever the secretive tech giant of the world -- definitely has its sights set on leading the Chinese search engine market. How better than to release Android into that market and -- overnight -- up the ante in a huge way against Baidu.com's search engine dominance?

The news that Baidu.com (NASDAQ: BIDU) was being included in the NASADQ 100 index is not just a big deal for the high flying Chinese stock, but rather continued validation for investors who look abroad to make big gains. The fact that another foreign company has been added to the prestigious index, shows that more and more large companies are headquartered outside the US, and that the real strong economic growth is continually coming from emerging markets. Investors tend to think of Latin America and China/South East Asia as the traditional emerging markets, but there is another market, that has also performed exceptionally well over the last five years, and in times of global market turmoil, has been a refuge for emerging market investors

That market is Israel. With more stocks trading on the NASDAQ than any other country in the world, Israel has learned that economic success depends on exporting ingenuity. With a very small domestic market, even though GDP growth is continuing in the 5.5-6% range, what intrigues foreign investors is the innovative technology that comes out of Israel. If you look around at the products you use on a daily basis, you will find embedded in them key Israeli intellectual property. Companies from Checkpoint Software (NASDAQ: CHKP), which makes the firewall that sits on your computer, to Teva Pharmaceuticals (NASDAQ: TEVA), the world's largest generic drug maker, are just a small sample of this.

Today's news isn't just great for Baidu, it's more validation for emerging economies as a whole.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer is long BIDU,CHKP and TEVA as of 12/04/07.