LinkedIn (LNKD) is coming unhinged.
Discussed in this article: LinkedIn ( $LNKD )
I want to look at LinkedIn ( NYSE:LNKD ). I’m not sure that I’ve done any Free Chart video’s on LinkedIn ( NYSE:LNKD ), I don’t think so. Here’s what I’ve been looking for on the premium content side; this has been doing what I call a touch-and-go. Use the 200-day moving averages like a reference for the runway. The stocks moving up, it’s not in a big downdraft like that, it just kind of starts drifting downward, like a plane coming in for a landing. There’s the runway, and what we’re looking for, we’re not predicting, we are looking for it, is a bounce off of the 200-day moving average where the stock then trends higher. If the stock does that then our interpretation is that this entire move here has been really, really healthy consolidation, we like to see this healthy consolidation here, because then that frees the stock to move higher.
Well guess what? We haven’t seen that, so this is not a touch-and-go, this is like Mayday, Mayday, let’s close runway 12 because we just got an aircraft that crashed here. This stock has now broken support, the way it’s going now, and the stock has been in a fairly tight trading range, not really technically a squeeze, but you can see it has been fairly, I was going to say un-volatile, would it be ill-volatile? Would it be volatility-less? The stocks been trading without much volatility, how’s that? The trading ranges have been pretty narrow. So, with this support here, broken, this would be the support right here, with the support broken, man, this is a move, and it’s a move on high-volume.
This is a move that could go a while, so I would not be buying this stock. Even if the stock rallied back above 200.00, what’s happening then? The stocks is just coming right back up into resistance, that’s not going to work for you. So I would just stay away from LinkedIn ( NYSE:LNKD ), and frankly, for a nimble trader, I would short this puppy right now. If you’re not so nimble then you want to wait for a little rally here first, and then if it rolls over then you start shorting it. But the way this thing traded, unless there’s something weird that happens overnight, I can see more selling, I can see more selling at the open. I mean this just looks like it has a lot of downside momentum.
Now I’ll take the other side of that argument though, you have to be careful about a stock that is so obviously breaking support; it’s like everybody and his brother as long as his brother trades, would be looking at this and say I want to short LinkedIn ( NYSE:LNKD ), I want to sell LinkedIn ( NYSE:LNKD ). Now if that happens, if it were to happen at the open or something, you could get a gap down, and then the stock start to move higher again. But you have to watch for these obvious trades, because if this stock does not continue to sell, what is that telling you? That’s telling you that the selling here is pretty much over, that’s not to say that you should buy this stock and expect new highs, but you can at least take the stock for a ride to the upside into this resistance level, maybe $10.00 or so, 5 percent, and then look for it time to roll over.
The bottom line is, right now from what I see on this, if you want a quote “strategy session” on LinkedIn ( NYSE:LNKD ) I would say you just want to stay away, if you have to make a trade I would sell it. By the way, always use a stop on things like this; use a position management tool, either position size or a stop-loss, don’t just sit there and expect this thing to do what you want to do.