Akamai Technologies Inc. (AKAM) was upgraded Thursday to a buy by TheStreet's Quant Ratings service. I took some time to look at the charts and indicators of AKAM and found that prices were on the verge of a very important upside breakout. Got your attention?
In this daily bar chart of AKAM, below, we can see a strong rally from August. There is a runaway or measuring gap in December. Prices are above both the 50-day and the 200-day moving averages. The 50-day line has provided support and was tested several times in February and April. You can see a bullish golden cross of the 50-day and 200-day averages in early December.
The rising On-Balance-Volume (OBV) line helps to confirm the strength of the advance. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since early October and is turning up again to a fresh go long signal.
In this weekly chart of AKAM, below, we went back four years to show how important the price level is -- AKAM is poised to break out over the highs of 2015. Prices are well above the rising 40-week moving average line. The weekly OBV line has been moving in the right direction with prices and the weekly MACD oscillator is close to crossing to the upside for a new buy signal.
In this weekly Point and Figure chart of AKAM, below, we can see a large base going back to 2015. A weekly (Friday) trade at $79.00 will be a major upside breakout for this stock. The base measures to the $112 area and maybe higher.
Bottom line: A quantitative buy. Strong daily and monthly bar charts. An incredible Point and Figure chart with a big upside target. Do I like the long side? Heck yeah. Traders could go long AKAM at current levels and look to add above $79. Risk below $73 for traders and below $70 for investors. The $110 area is my target for now.
