For his final "Executive Decision" segment of Mad Money Thursday night, Jim Cramer checked in with Tom Leighton, co-founder and CEO of Akamai Technologies Inc. (AKAM) , the edge computing provider.
Leighton explained that Akamai servers currently operate in over 4,000 locations in the U.S., close to consumers, so companies can deliver fast, secure and reliable services. In industries like banking, commerce and streaming, Akamai is more important than ever and will be more important as 5G wireless becomes mainstream.
With 30% earnings growth and 32% operating margins, Cramer said Akamai is a buy.
Let's check and see if the charts are bullish too.
In the daily bar chart of AKAM, below, we can see that prices quickly recovered from the February-March decline and rallied to new highs. Prices are trading just above the rising 50-day moving average line. The 200-day moving average line has a positive slope too.
The On-Balance-Volume (OBV) line is a potential problem for chartists like myself because it has been in a decline from February, which suggests that sellers of AKAM have been more aggressive. The situation could improve with the OBV line turning higher but right now a move over the peak of July would be a welcomed development.
The Moving Average Convergence Divergence (MACD) oscillator just moved below the zero line for an outright sell signal.
In the weekly bar chart of AKAM, below, we can see that the shares are up significantly over the past three years. AKAM is above the rising 40-week moving average line.
The weekly OBV line shows a rise from early 2019 and appears to be stronger than the daily OBV line. The weekly MACD oscillator is above the zero line but very likely to cross to the downside for a take profits sell signal or a sell in an uptrend.
In this daily Point and Figure chart of AKAM, below, we can see a potential downside price objective in the $100 area.
In this weekly close-only Point and Figure chart of AKAM, below, we can see a potential upside price target of around $147.
Bottom-line strategy: Patient traders could probe the long side of AKAM in the $110-$105 range risking a close below $100. On the upside we look for future gains to the $147 area.
