LinkedIn stock has moved from December’s low $56 up to $109, gaining almost 100% in 5 months! The popular business social network’s initial public offering (IPO) took place exactly one year ago and despite investors’ skepticism initially, LinkedIn shareholders now feel very confident of their investment. The LNKD daily stock chart shows a profound uptrend that has recently hit new highs and includes a significant gap up, which was never filled as a proof of LinkedIn stock buyers’ power.
According to technical analysis of stock trading, a gap must get filled before the trend resumes. In the rare occasion that stock prices continue trending without a big pullback to the latest resistance level, long positions are favorable. In LinkedIn stock chart, prices pulled back to the gap’s support level, a bit higher than previous resistance level and they are now heading even higher that the resistance found at $107. Numerous opinions of active traders online mention a likely climb to $110 and above for the social media’s stock.
On the other hand, there’s MACD divergence that could possibly indicate a reversal at the stock’s top, while RSI is flirting with 70+ numbers that is interpreted as overbought market conditions. However RSI overbought or oversold conditions should be taken into account in consolidation phase and sideways stock movements instead of strong trending markets. Besides, MACD divergence may not be verified leading to an even stronger uptrend, in case LNKD stock moves higher than $107 this week.
Although I am not such a fan of LinkedIn business social network, I was honored to be offered a place into the LinkedIn group of ForexPros Contributors! If only I had bought LNKD shares back in December’s low, I would post more there instead of… Facebook!