Two Shorts and a Long

Over the past eight months LinkedIn (LNKD) has pulled back about 45%, from its all-time high to a 62% retracement of its historical range. The stock then moved off its May low to the 50% retracement level, and began consolidating in that area. This process of basing and consolidating created a cup-and-handle pattern with rim-line resistance at the $164.25 level.

LinkedIn (LNKD) -- Daily Source: StockCharts.com View Chart » View in New Window »

On the chart above, the daily moving-average convergence-divergence (MACD) indicator is overlaid on a weekly histogram of the indicator. The daily is moving above its centerline, and the weekly is making a bullish crossover. Positive money flow has been strong, and LinkedIn looks like a play on good risk-reward play at its current level, with an initial position size that allows for a stop under the 50% retracement level....310 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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