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Prep for Another Drop in Akamai

Sell AKAM if you own it, or short it


Akamai Technologies (NASDAQ:AKAM) — Akamai has been a favorite of the Trade of the Day since Oct. 31, 2011 — then recommending the stock as a buy at $29. The stock ran to almost $40. But when the company missed its Q1 and announced its CEO would retire, we recommended selling it on April 26 at the market. It had closed at $39.76 the day before.

I also said, “This is a very volatile technology stock, and so a fall back to the low $30s might be a place to reinstate new positions.”

But despite positive reports by several research analysts, the stock fell to under $26 and on a bounce failed to close above its 200-day moving average. This failure confirmed that a huge double top is in place. Sell AKAM if you own it, or short it with a price objective of $26. A stop-loss should be placed at $32 to protect against a reversal.

Trade of the Day Chart Key



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