The price of LinkedIn (LNKD) gapped down sharply last night and is off the bottom of this chart, below.
The size of the gap or price void may surprise some, but the technical setup before this particular gap was bearish. Actually, gaps are not a rare occurrence to this name, as you can see in the chart above. Chartists should be able to quickly find five gaps.
What did the chart suggest before last night? Prices were already in a down trend and below the declining 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line was trending lower, telling you that sellers were more aggressive with heavier volume on days when LNKD closed lower.
The Moving Average Convergence Divergence (MACD) oscillator was in negative territory. LNKD is trading this morning below the August/September lows -- the support zone in the $180 to $165 area. Prices were not in that area for long, so traders should not have expected much buying interest on a retest.
This chart, above, does not offer encouragement to the longs. On a weekly timeframe, the OBV line is pointed down, prices are below the declining 40-week moving average and the MACD oscillator is bearish. The most bearish aspect of the chart, in my opinion, is that the 2014 lows are broken!
The next chart point should be the highs of 2012 (not shown) in the $125 area. This previous resistance area on the way up should hopefully act as support on the way down. Stay tuned.