12/02/16 closing share price: $100.98
52 week high: $276.18
Most recent dividend: –
Annual dividend yield: –
LinkedIn shares have been one of the many victims in the recent US technology shakeout. Last week’s earnings were solid but the guidance was below market expectations and the share price took a 40% hair cut during the same day. It has since settled just above the $US100 level where we think it is seeking support.
Based on the five year chart, the $US100 as previous resistance could form an important support level where the stock can then resume another upward leg in a more joyous market. We would be inclined to take a long position here with a very tight stop loss at $US92 per share. The risk to reward on this trade is very low – volatility in the market is high, but that could move in both ways. Remember, LinkedIn earnings still rose by more than 60% – smashing market estimates. The future is not as bleak as what the market believes. The key here is to hold a tight stop loss, 8% below the current price range.
Invast Conviction call: Buy
Stop loss: $92.00
Time frame: 2-3 months