NEW YORK (TheStreet) -- LinkedIn (LNKD) started a bottom mid-May, after a typical high-frequency trader attempted a sell-down, which failed. After that, within three days of a huge-volume spike selloff on May 7, 2014, the stock formed a long candlestick tail with a small body. This classic reversal pattern confirms both indicators, volume and balance of Power, in the chart windows below price. Balance of Power tracks large-lot vs. small-lot activity for quiet accumulation.
Since that reversal pattern, the stock has made two higher lows and three higher highs in May, June and July, indicative of a stock trending out of a bottom. The most recent price action of the past couple of days is a continuing momentum run starting on July 18, through Wednesday, July 30, as LinkedIn prepares to release its earnings.
Time segmented volume compares volume patterns over time to evaluate whether large lots are buying incrementally. TSV continued to rise for the lows formed by the May reversal pattern. This along with MoneyStream in the bottom chart window, confirms that some large-lot accumulation was under way.
This is a typical pre-earnings run as technical traders anticipate the report. In addition, it is also partially in response to the Twitter (TWTR) surprise earnings report, along with the Facebook (FB) better-than-expected report. LinkedIn technically is set up for the earnings to be a positive report, and high frequency trading is being anticipated by professional and institutional traders whose momentum-style buying has moved price up beyond the initial bottom resistance level.