Looking to get a head start on Akamai (AKAM)? Here’s how. (May 07, 2018)


We are looking at Akamai ( NASDAQ: AKAM ) today. Last week, in our Strategy Session, I mentioned that this stock is in a volatility squeeze. I am just kind of bringing this around today because it is still in this squeeze. Now, two days in a row the stock is up and closing at it’s intraday high, close enough. With the extra volume today it gets us right back to about average volume over the last 20-days.

This is always the case with averages; if you take this day and this day and this day out you will see that this is actually quite a bit ABOVE the average daily volume. So this is a little bit, frankly, artificially high in my view and a lot of it has to do with this earnings here. The stock gapped up and then sold off but now the stock is retracing that gap. So it is actually just less than 2 percent BELOW where the stock opened up after an earnings report.

So here is the trade, I think: You can buy the stock here; you are getting a little bit of an early start on it. I would look at this and say that real resistance could even be here or maybe $75.00 just because it is an even number here. Then we have got support here; you are buying the stock, you’re taking a little bit of the stock right here. And then if the stock pulls back, if it were to pull back, then you get out of the stock and take a small loss; you should never take a big loss. Then if the stock continues to move higher then once it runs past this high here of 74.50, once it runs past 74.50 then you are taking more stock. So you have got a lower cost basis in the stock than if you had just waited for it to break out above 74.50 before taking any action on it.

So this is a way that you can be getting in a stock that looks like it has a lot more upside potential. But you are not waiting so long that there are other people behind you that are looking to take profits right about the time that you are starting to get in on an initial position. So you might try to take some of the stock now; just start a little position right now if you haven’t already and then be patient, wait for the stock to break out to a higher level and then you add to that position.

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