Akamai Technologies Inc. (AKAM) was upgraded to a buy today by TheStreet.com's quantitative service. AKAM has been holding up better than many other tech names in recent weeks and that by itself is something to envy. Let's check out the charts and indicators on AKAM to see if it can display some year-end rally leadership after this quantitative buy recommendation.
In this daily bar chart of AKAM, below, we can see that AKAM made a minor high in June and a small double bottom pattern in October. Prices gapped higher in late October on heavy volume and it has drifted slightly lower this month forming what might be considered a flag formation. Prices are holding between the flat to slightly rising 200-day line and the still bearish 50-day line. The daily On-Balance-Volume (OBV) line has turned up from early October and suggests that buyers of AKAM have begun to act more aggressively. The Moving Average Convergence Divergence (MACD) oscillator has crossed above the zero line this month for an outright go long signal.
In this weekly bar chart of AKAM, below, we can see a mixed picture with respect to our favorite indicators. Prices are slightly below the flat 40-week moving average line. The weekly OBV line is down from July but up from October. Overall the OBV line has not declined much and suggests a bullish underlying situation. The Moving Average Convergence Divergence (MACD) oscillator has narrowed from below the zero line for what could soon become a buy signal.
In this Point and Figure chart of AKAM, below, we can see a potential long-term upside price target of $94 being projected. A rally to $73 will help while a decline below $67.41 will weaken the picture.
Bottom line strategy: AKAM could get dragged down by the rest of the market but it looks like the path of least resistance looks to be to the upside. Traders and investors could go long above $74 looking for a rally to $95. Risk a close below $66.