Stalking LinkedIn for a Buy

 | Jan 22, 2014 | 7:00 AM EST  | Comments
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Stock quotes in this article:

lnkd

A while back, I identified a possible buying opportunity in LinkedIn (LNKD), even though it was a countertrend trade at that time. Both time and price parameters were evident at the Jan. 7 low. The price support cluster is still visible on the daily chart below along with the Fibonacci timing cycles that came due between Jan. 6 and Jan. 9. Since then, we've had a nice rally off the original decision with a rally of $35.88.

You can see on the daily chart below that LinkedIn had a hard time getting above one of the hurdles on the way up. The hurdle included a .618 retracement and two 100% projections of prior swings. When we test important hurdles like this, if you are shorter-term oriented, it's a great time to tighten up your stops. So how can we look at LinkedIn right now?

 

LNKD Daily
DynamicTrader

 

We know we have a pivotal time/price low in place on Jan. 7, and if that low is any good, then we should hold on a pullback to it. I have fine-tuned a pullback zone on a 30-minute chart for a "setup" within a bigger picture setup. I know that if the bigger picture setup plays out, the 273 handle is the initial upside target. So let's look at the 30-minute chart next.

 

LNKD 30-Day
Dynamic Trader

 

On the 30-minute chart, I'm watching two standout price support zones. The first zone comes in at $214.68-$217.94 and includes at least six or seven price relationships. The second zone comes in between $209.32 and $212.31 which includes three key price relationships. We are currently testing the first support decision.

I am watching for a buy trigger on the 15-minute chart at this point as long as price holds above one of these zones. It will trigger an entry for me if I see the 8 ema cross above the 34 ema, along with taking out a prior swing high on that time frame. If this occurs, then I have reason for a new buy entry in LinkedIn with my risk defined below the low that it made prior to a buy trigger, or below $208 if you want to give it a bit more room.

Let's stalk LinkedIn for a new buy trigger. If this same key support is violated instead, stand aside and keep your powder dry!

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