Looking for a Secondary Entry on LinkedIn

 | May 15, 2013 | 9:00 AM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:


When I talk about a trade setup, many traders will ask me, is it too late? Can I still do this setup? My answer will depend on whether we have met the target for the actual trade setup.

So today, let's look at a trade setup in LinkedIn (LNKD). The most important part of this trade setup is the symmetry you can see with the prior declines on this daily chart. Note that I have labeled two prior declines on this chart: $32.63 and $30.75. Those are kind of similar in price. I projected 100% of both of those prior declines from the recent high made on May 2.

LNKD Daily

Now we have violated the first projection, so that is no longer on the chart. When a level is violated by a decent margin, it no longer has any value, as far as I am concerned.

The second projection, along with a couple of price extensions, did end up holding, though. Note that the recent decline into the May 10 low was very similar to the prior two declines, as it was $32.04. The zone that ended up holding came in at the $168.26-$171.22 area. The actual low was made at $170.87.  

Since the initial upside target for this setup does not come in until $211.62, I don't believe it's too late to get involved. What I like to see, however, is a pullback, so I don't give away the edge! At this point, what I will look for is anywhere between a 50% and .786% retracement back to the recent lows for an entry. If you want to fine-tune an entry even further, you can actually wait for at least another trigger after the pullback. For example, you can wait for a five-minute chart to trigger an entry after you see at least a 50% pullback.

Here is an example of a pullback to the recent low on a 30-minute chart. The levels will have to be recalculated if a new high is made first.

I will consider myself wrong if the May 10 low is taken out.

LNKD, 30-Minute
Dynamic Trader

For more information on trades and triggers, please click here.

Columnist Conversations

today is a good day to lighten the load and take some positions off the table. SOLD WB OCT 85 CALL AT 11 (i...
I reached out last week to my close friend Ken Shreve, who is a prominent writer for the IBD.  I asked Ke...
I reached out last week to my close friend Ken Shreve, who is a prominent writer for the IBD.  I asked Ke...
View Chart »  View in New Window »



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.