On April 30, 2015, we presented downside targets for LinkedIn Corp. (LNKD) when the stock was trading at $199. In our concluding commentary we said the following:
“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.”
Between the closing price of $192 on February 4, 2016 and the opening of February 5, 2016, LinkedIn Corp. had declined nearly –30% in after-hours trading. The opening price on February 5th was at $125. Below is an updated price chart applying Edson Gould’s Speed Resistance Lines.
As indicated nearly one year ago, at nearly double the price, the extreme downside target of $92.06 was a distinct possibility. Additionally, anyone willing to take the risk at $139 or below has had favorable prices from which to choose. What should be noticed is the fact that LNKD managed to hit the extreme downside target and then bounce above it, for the time being.
There is incredible pressure for this company to be turned around or absorbed. It is with luck that the stock has managed to bounce at the level we outlined. However, further marginal failures by the company could result in a retest of the $59.07 price.