Akamai Technologies Continues to Drop

Akamai (AKAM) suffered an extremely damaging breakdown last Wednesday following its fourth-quarter earnings report. The stock opened that session with a huge downside gap before finishing the day with a 10% loss on its heaviest volume since last July. After consolidating for a few days AKAM is heading lower again as this week comes to a close. In the near term, investors should expect more downside, which will result in a low-risk entry opportunity.

One day before last week's post-earnings collapse, AKAM closed just barely at its highest level since October 2015. The stock first began bumping up against heavy resistance near the $71.00 area in early October and appeared headed for a breakout in early January. As AKAM continues to fade away from major resistance near $71.00, which has now capped the October, January and February highs, an ominous top is in place.

Intense overhead pressure will likely drive AKAM down to the $59.00 level. This area is a major support zone and includes the stock's July high as well as the huge earnings-inspired breakout gap left behind back on Oct. 26. Also in this area is the 200-day moving average. If Akamai can regain its footing here, a low-risk entry opportunity will develop for patient investors. Until then, the stock will likely continue to provide pain.

Click here for chart in Pop-up Window

No Positions

If you liked this article you might like

Resist All the Dow 22K Hoopla: Cramer's 'Mad Money' Recap (Wednesday 8/2/17)

Chevron, Universal Display, Dynavax Technologies, Schlumberger: 'Mad Money' Lightning Round

Apple Fails to Squash Lawsuit Alleging It Disabled FaceTime on Older iPhones

Akamai Technologies Stock Crumbles on Weak Current Quarter Guidance

Netflix Sees Stream of Analysts Jump Into $200 Price Target Boat