LNKD is one of the main horsemen in this year’s internet sector rally. It’s a $27 billion market cap company (with less than 5,000 employees in total) that has more than doubled in 2013. The stock has that unstoppable aura where even bad news has turned into good news…and a stock chart that shows that all-too-familiar pattern these days of breakout-consolidation-breakout-consolidation.
Here’s the lifetime weekly chart to illustrate its massive 2 year run:
The stock’s high shortly after its IPO was around $120, and that level served as stout resistance until February 2013, when the stock finally broke out from that level on earnings, and never looked back. The stock then consolidated those rapid gains for a few months, until cleanly breaking out above $200 in July.
With the stock consolidating for the past couple months (and absorbing a large secondary offering in the meantime), is the stock setting up for another breakout to new highs? Or is the stock at the start of a more meaningful pullback?
On the daily chart, the stock breached its 50 day moving average yesterday for the first time since June:
However, no major technical damage will be done unless the stock breaks $220 in the coming days. In that case, all the buyers of the stock since the early August earnings gap will be down on their purchase, which will create a more ominous technical setup. As for a fundamental valuation for a company like LNKD, your guess is as good of mine.