On June 13, 2016, Microsoft announced that it was going to acquire LinkedIn Inc. (LKND) for approximately $26 billion.
Based on our prior work, LinkedIn Inc. (LKND) has helped to make Edson Gould’s Speed Resistance Lines (SRL) one of the most interesting indicators to watch when it comes to a stock that has established a declining trend. On April 30, 2015, we said the following of LinkedIn:
“In the prior decline, LNKD fell to slightly below the midpoint target at $133.19. This suggests that the current slump should go below the conservative downside target of $187.68. Going below the $187.68 level should get the stock price to the ascending midpoint target of $139.87. Those interested in LNKD should consider the stock in stages at or below the ascending $139 level with an acceptance of a decline to the ascending $92.06 level.”
LNKD did decline below $187.68. However, rather than decline to the $139 level as anticipated, the stock price declined directly to the ascending $92.06 level. At the time, for anyone serious about investing in LNKD, the dramatic after-hours decline from above $187 to below the $139 level indicated that LNKD was an open target for consideration.
Below is LinkedIn’s stock price based on Edson Gould’s Speed Resistance Lines.
Now that Microsoft (MSFT) has decided to absorb LinkedIn, we believe this SRL has served our analysis purposes well. We continue to maintain that Gould’s SRL, when applied to the appropriate stock, has delivered the most fascinating results.