Market Overview

LinkedIn Corp Shares Testing Short-Term Patience Of The Bulls

LinkedIn Corp Shares Testing Short-Term Patience Of The Bulls
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LinkedIn Corp (NYSE: LNKD) shares appear to be vulnerable in the very short term, but the overall picture still looks good for the bulls.

Here is a recap of Benzinga's last report on LinkedIn from September 2:

  • The bulls in LinkedIn had been riding high since blowing right through key resistance at $190. The technical strength of the stock was a huge factor in the bullish crowd's investment thesis.
  • The bulls believe that LinkedIn has the greatest future of all the social media stocks because of its real utility for the business crowd. Additionally, LinkedIn's pristine balance sheet and huge cash reserves gave the bulls even more confidence.
  • The bears in the LinkedIn arena claim the company has to execute to perfection in perpetuity to justify the stock's very lofty valuation metrics. Technically, the bears pointed out that the stock was overbought.
  • Technicians noted the only way the bears would re-gain control of the situation would be for the stock to close below $180, but that support at $213.77 and $201.67 would get in the way of that. Meanwhile, the stock had a projected upside target of $255.65.

Related Link: Google Inc Technicals Still Showing Relative Weakness And A Bearish Setup

Technical Update

Technicians say that the pullback in LinkedIn stock in the last couple of weeks is perfectly healthy thus far.

Shares have violated one support level already at $213.77 and could be testing the next level at $201.67 very soon. It is not inconceivable for shares to fill the upside gap that occurred in early August and still be in good shape technically. To do so, the stock would have to trade all the way down to $180.64. Being in good shape technically would be little comfort to those who bought near the recent highs and rode it down 20 percent.

LinkedIn may be in for more downside in the short term, but the macro picture for the stock is still bullish.

At time of publication Friday, LinkedIn was trading at $207.61, down 1.37.

Stock chart: 
Stock chart

Posted-In: LinkedInTechnicals Movers Trading Ideas Best of Benzinga


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