LinkedIn Corp (NYSE:LNKD) shares have declined about 27% this year so far. But technical analysis of the stock shows that it’s all set for a fresh bullish wave, says Crisp Idea analyst Mita Mehta. The research firm has a 6-month price target of $206 and the 3-year price target of $550. Crisp Idea has a Buy rating on LinkedIn. The professional networking giant’s stock price is at the beginning of the 3rd wave based on the Elliot wave theory.
LinkedIn’s technicals show the formation of Hammer Candle
The 3rd wave is usually the most profitable and dynamic one. The formation of Hammer Candle on all time frames (hourly, daily, weekly, monthly) suggests strong accumulation. Formation of Hammer Candle on the monthly chart indicates trend reversal. Immediate resistance is seen at 20-month weighted moving average of $180.58 and 5-month WMA of $208.48. LinkedIn Corp (NYSE:LNKD)’s relative strength index is at 47.22 after being oversold, which is suggestive of a fresh bullish wave. The stochastic value of 19.46 also suggests that the stock has reached oversold position.
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The relative strength index (RSI) shows that LinkedIn Corp (NYSE:LNKD) has once again started outperforming the broader Nasdaq-100 index. After a long downward spiral, the stock formed a Doji Candle with solid volume on May 9. That’s the first evidence of trend reversal. The moving average convergence divergence (MACD) is turning from downside to the median line, which further suggests that the downtrend is about to end. This represents a lucrative opportunity to buy the stock. The stochastic was oversold, and has started rising now giving positive crossover which indicates a new bullish wave.
LinkedIn has no immediate resistance in sight
LinkedIn Corp (NYSE:LNKD)’s daily stock chart shows that it is trading above all the averages, so there is no immediate resistance in sight. The RSI position and MACD above the median line show that the stock has strong upside momentum. That’s further supported by the directional indicator ADX. Crisp Idea says LinkedIn’s +DMI is now higher than the -DMI. It validates the research firm’s thesis that the stock will make a solid comeback.
LinkedIn Corp (NYSE:LNKD) shares gained 0.24% on Tuesday to close at $155.81.