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AKAM pops big this week. Runs right into congestion. Analysis for Akamai Technologies

Post 23 of 52

The recent price action has been for AKAM bulls.  The stock popped off of two support areas with a vengeance.  The stock is now at a previous level of congestion.  We will have to see if the stock can continue this momentum, or if it has run right into a trap.

AKAM pops off of support:

AKAM pops this week

AKAM finds buyers at key support levels.

There are two key support levels that helped push the stock into new highs after the large gap down.  The first is the long term uptrend line (blue dashed line).  This line has proven its strength once again.  The green dotted line at 35 was previous support many times in the past and also proved itself to still be in play.

This big up move ran right into a very important resistance area (red dotted line) at 38.50 – 39.  This area has been very strong in the past.  It may be even stronger that the uptrend support.  All breakout attempts have failed here.  This has also been one ugly congestion area as well.  If the stock can definitively break 39 and then 40, then we could see a serious pop in AKAM.  That’s easier said than done given the past resistance we’ve seen here.

So, we may be setting up a sideways market in AKAM for the long term.  It’s right at strong resistance here.  If it takes a dip, then it would be right at support.  Just because it’s sideways, doesn’t mean it is not tradable.  Many traders like to use sideways action to sell into resistance and buy into support until a real trend breaks out.  It can be a great swing trader’s market.

 

Short Term:

AKAM pops, but not without worries

AKAM 15 Minute Chart uptrend with RSI

I like the look of this short term chart.  It is plain to see the strong uptrend using this 15 minute time-frame.  This trend line represents strong short term support.  As long as we are above this line, AKAM should steadily find buyers.  A definitive breakout below the line could spell trouble.

Believe it or not, we may actually have a decent breakout signal in from the RSI.  The RSI was in a downtrend channel on Friday, but it broke out at the end of the day.  This is usually a good buying opportunity.  Of course, you need to confirm the signal with other signals.  We don’t have much in the way of confirmation here, but we did see the uptrend line hold firm on Friday as well.

Given this information, I would expect short term prices to increase AKAM.  I have highlighted a few key support areas to watch in case of a dip (37.80 and 37.20).  The major support line would be the level to watch for in case of a big push to the downside.

 

So in conclusion, I would expect sideways action in the long/intermediate term for AKAM.  In the short term, I am looking for a continuation of the upward momentum we’ve been seeing.  AKAM should get interesting here.  Let’s see what this stock can do!

 

Special thanks to Jeff F. for requesting I analyze this stock.  If you would like me to analyze an investment for you, just leave a comment below.

 

Thank you for reading.

Happy Trading!

 

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This article was written by joe.shehata

  • Stefan

    Can you please have a look at TSLA and IRBT?
     
    Thank you

    • http://www.toptiercapital.com/ TopTierCapital

      Hello Stefan. Thanks for the suggestions.
      IRBT: http://www.toptiercapital.com/2013/02/18/irbt-finds-support-at-uptrend-line-analysis-of-irobot-corporation/
      TSLA: http://www.toptiercapital.com/2013/02/18/tsla-falls-from-overbought-still-in-firm-uptrend-analysis-of-tesla-motors-inc/

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