Wednesday, August 03, 2011

LNKD Cup n' Handle

This cup n' handle looks pretty decent to me with a target that's $50 higher using the measure rule. The potential for LNKD to sqeeze is extremely high due to the small, overshorted float. This could start to fall apart if it got below $95 but above $110 it can soar. There might be a pause at $122.70, the IPO day high, but even with Bulkowski's conservative target, you get ~$135.

CAUTION: LNKD reports quarterly earnings tomorrow (after the close) for the first time since they went public. This report is likely to break the pattern one way or the other.

With the bollinger bands tightening I can't see a small move in the next few days. Most other indicators look bullish to me (RSI, CCI, MACD, stoch). Tomorrow we might hold mostly unchanged (as volume begins to swell) but I'd expect a large gap Friday.

Disclosure: I am long September LNKD calls.


Anonymous said...

Hi Hunter, it's Indigo here;

I'm trying to get my head around today's action but I just don't get it. In particular the USD rose despite the fact that short bonds are paying nothing.

Banks are threatening to charge for deposits...

"In an indication of how frightened investors are, Bank of New York Mellon said it would start charging large investors to hold their cash because they are depositing so much. The bank's clients include pension funds and large investment houses that are selling stock and need to deposit the proceeds."

Who is buying USD? And, why?

pythagoruz said...

Hey indigo, hope all's well. Yeah, I read about the Bank of New York Mellon. It is strange times indeed when a bank charges people for deposits. I'm not surprised so many people want to go to cash, the economy is stalling out and the government is pulling back. The dollar strength is tied to risk aversion, no doubt. But behind the scenes QE3 is in the works, and something tells me it won't be anything less than staggering. We'll find out Tuesday but I bet the dollar has another big leg down in it soon...