Is Akamai Ready for a Rest?

Published on Friday, 10 February 2012 06:40 Written by TradersHuddle Wire

New York, February 10th (TradersHuddle.com) - Shares of Akamai Technologies, Inc. (NASDAQ:AKAM) closed the trading day at $38.06 well above its calculated resistance at $34.25, which was calculated from a peak and throughs algorithm, making traders worry about a possible pull back in the stock price.

Akamai Technologies, Inc. (NASDAQ:AKAM) provides global delivery services for Internet content, streaming media, and applications and global Internet traffic management. The Company uses technology and software to offer tools that provide reporting and management capabilities; network data feeds and Website analytics, which provide customers with real time data about the performance of their content and applications over the Internet.

Akamai's stock broke out of its defined range that had support at $31.01 and resistance at $34.25. Now the stock is working on developing a new trading range, which should be defined by the high setup after this breakout and its probable support, which could be its previous resistance level $34.25.

From a technical perspective traders should wait to establish a position in Akamai until a base in the stock develops that can provide good reference points to the upside and most importantly to the downside, for traders have a risk reference point before entering into a position on Akamai stock.