Lnkd Trade Setup

Welcome to the StockOptionAssassin.com's free video for Swing Trading Options. In this video, we're going to look at a short trade setup in LinkedIn (LNKD). I took a small position in this today. Let's just go over the setup. First of all, LinkedIn. We got earnings here. In February, it rallied up. It has really just been consolidating here in this kind of range bound manner. What I'm looking to play is a rather sloppy head and shoulders pattern where you're consolidating here, managed to make a new high off this earnings after earnings had tanked, and then you rallied back up. This is my left shoulder, head, right shoulder. If we draw our neckline in there, you can see our neckline cuts through this area. Basically, what we've had so far over the last few days or a couple of weeks is we broke the neckline. You can see the moving averages have all turned down. This larger one is the 55 EMA. This is a pretty significant level to break. We broke down and now we're basically in the retest mode. You can see we came right back up a couple of days ago, retested the neckline, and managed to actually close back above this yellow line, which is the 21 EMA. But now we've rolled back over. Basically, what I'm looking at is I'm looking for a retest of this 160 level at a minimum. If we were to rally back up and close back above the neckline or back above this candle, which is from June 10th, then this trade would be over. I would stop myself out. That level right now, we'll call it 175. If LinkedIn closes back above 175, then this trade would be negated. For down side targets, I prefer to use levels here than actual minimum targets for head and shoulders pattern. You're going to have this little support area which is around 155. Then you have this gap window around 140. Ultimately, you have a gap fill at about 124. I think this is a little lofty here, but I think a retest of this low at 160 and possibly 154 -- I actually think this 140 level is pretty viable here. How I'm playing this is more of a home run play. I went with out of the money options in July. I picked up some of those today. I may look to add to that. It's really more of a high risk play. You're really risking everything if you put it like that. Now, you can look at deeper in the money options and risk less, if you will, but you have to choose that according to how you like to trade. That's my setup for LinkedIn. That's what I'm watching. I hope you enjoyed the video. You guys have a great day.