With the recent pullback in LinkedIn (LNKD), I'm stalking a couple of Fibonacci-based price-cluster zones for another entry on the buy side.
If you remember the old setup on this one, it was pretty much a simple symmetry setup: The stock hit its Oct. 16 low, essentially, at a support level based on symmetry projections (or "measured moves"). That support, at the $187.34 area, came from a simple 100% projection of a $44.94 decline from the April 22 high and the May 7 low. The actual low in this case was made $187.61 -- close enough for government work.
Now, LinkedIn has not yet met the target off that low, around $244.43. For this reason I am interested in this pullback, as I believe the next run could bring us near that original bigger-picture target.
So let's look at the major support zones here. Of the two illustrated on this daily chart, the standout area is $211.24 to $214.24. This is where the setup would be a two-step or zig-zag pattern, as it encompasses all the key Fibonacci price relationships in an ideal fashion for that formation. I would watch another zone below this, as well -- $204.76 to $207.89 -- though the price relationships in this one don't come together as well as they do for the first zone.
Bottom line: If LinkedIn tests and holds above either of these zones on the daily chart, I'll look for a buy trigger on a 15-minute chart and then define my risk below the zone in question.
There is one other area I would consider, and it appears on a 30-minute chart, which I typically use to set up day trades or to refine entries for a swing trade. As a general rule, there are more swings to work with on the lower time frame, and there are times when the stock won't test the daily zone, but will hold on the intraday.
On the 30-minute chart above, then, you can see one other area of possible support that comes in between $217.28 and $219.30. I still prefer that first zone on the daily chart, but we don't always get what we want, and I prefer to be flexible.
So I continue to stalk LinkedIn for a buy entry. But if these support decisions are violated, I will back off the buy side until further notice.
Please refer here for more information on trade triggers.
See here for general guidance on Fibonacci trade setups.