Stock of the Day
My Stock of the Day is Akamai (AKAM).AKAM is a great growth company, that often trades at a premium multiple. The stock suffered a tumble after reporting earnings in April. It wasn't that the earnings were bad, but that investors had lofty expectations, and punished the stock unfairly when they didn't raise guidance more.
The stock has been undergoing a correction for the last couple of months, but the recent action leads me to believe that the correction is almost over, and the stock is ready to resume its uptrend.
A look at the chart shows that last week, the stock vaulted out of its recent consolidation range on a big spike in volume. The next day, the stock added to its gains on another big volume day. Since then it has been trading sideways, despite the big down day in the market.
I think the stock is ready to overtake its 50-day average resistance that lies just ahead. Over time, I expect the stock to go on to make new highs again before the end of the year.
As for the rest of the market, it too has been adding to its gains throughout the day. The market is still oversold, so I think this bounce should last a bit longer.
long AKAM
posted by J. Kahn @ 11:28 AM
2 comments
2 Comments:
I think i'm a little more worried about this name. While earnings seem to be picking up and expectations are high, the relative strength of the entire group is abysmal. Also, the volume from the April washout dwarfs the volume from Friday and Monday's gains.
I don't have anything long or short, so i'm not talking my position but I want to find out more on the name and the sector because it look a bit dangerous to me.
By the way - how do you California traders schedule your day? I get up at 5:30 in Atlanta and still don't get enough reading done before the market opens. Do you even get into work before the market opens? things that make me go hmmmmmmm
haha, good question Zach. I usually wake up at 8 AM PST just before classes start so it gives me time to evaluate my positions and get 2 hours of reading in.
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