How to Play the Setup in Akamai

Published on Tuesday, 19 June 2012 08:40 Written by TradersHuddle Wire

New York, June 19th (TradersHuddle.com) - Akamai Technologies, Inc. (NASDAQ:AKAM) closed the trading day at $31.33, near its 50 day and 200 day moving averages set at $32.21 and $30.43 respectively. Akamai's price action placed the stock above the 200 day moving average but below its 50 day moving average, a setup that signals a possible break out.

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 seems to be setting up for a tight range between the 200 day moving average as support and the 50 day moving average serving as resistance.

A tiered approach, appears to be the best strategy to maximize possible movements in the stock, as traders could establish a small position in Akamai and wait for the stock to break out above its 50 day moving average at $32.21. Then they could add to the position as momentum builds with the breakout. On the flip side, if support being referenced at the 200 day moving average set at $30.43 breaks, it could signal further downside pressure for Akamai.