Shares of Akamai Technologies surged more than 10% on Friday following the company’s strong earnings report and increased profit outlook. The cloud services company experienced robust demand for its computing and security offerings, which contributed to the positive financial results.
Akamai’s stock had faced a decline of about 31% between February and June, causing concern among shareholders. However, the company’s latest earnings report provided some relief as it revealed that sales in its compute and security segments accounted for two-thirds of total revenue for the first time. This shift in focus towards profitable areas of the business helped alleviate worries about slowing revenue growth in the content division.
Analyzing Akamai’s chart, it is evident that the stock formed an inverse head and shoulders pattern between May and August. The breakout above the pattern’s neckline occurred after the company’s upbeat quarterly results were announced. Notably, this breakout happened on the highest trading volume since early May, indicating a higher likelihood of follow-through buying.
Moving forward, there are several important price levels on Akamai’s chart that investors should keep an eye on. The first level is around $102, where the stock may encounter overhead resistance near the August 2023 earnings gap, the prominent October swing low, and a countertrend move that formed in April. A close above this level could lead to a test of $109, where sellers may look to lock in profits near the September and October twin peaks. This area also aligns with a range of comparable trading levels from late February to early April and the closely watched 50% Fibonacci retracement level.
The next level to watch is around $113, where the stock may face resistance from a trendline connecting a minor peak in November last year with the March high. Finally, if buying momentum continues, the stock could reach the $120 level, where it is likely to encounter selling pressure near the December 2023 swing high.
It is important to note that the comments, opinions, and analyses expressed in this article are for informational purposes only. Investors should conduct their own research and analysis before making any investment decisions.
In conclusion, Akamai Technologies’ strong earnings report and increased profit outlook have led to a significant surge in its stock price. The breakout from the inverse head and shoulders pattern indicates a positive trend, and there are several key price levels to monitor in the future. Investors should stay informed and cautious while considering their investment options.
Disclaimer: The author of this article does not own any of the securities mentioned. This article is for informational purposes only and should not be considered as financial advice.
