Akamai Earnings Strong But Stock Downgraded, Cycles Point to Volatility

Steve Miller

Akamai Technologies NASDAQ: AKAM reported Q1 earnings on 4/28 after-hours. The company reported EPS of $1.20, which beat consensus estimates of $1.16.

Revenue came in at $764.30M, which also beat consensus estimates of $749.75M.

Akamai pulled its full year 2020 guidance due to uncertainty associated with the COVID-19 pandemic.

On the heels of this report, Morgan Stanley downgraded Akamai stock (AKAM) from Overweight to Equal-Weight and set a $107 PT. The analyst believes that the remote-work tailwind will fade through the end of the year.

AKAM traded down about 4% on the trading day.

Given this background, let’s take a look at the weekly charts.

Akamai Technologies (AKAM)

akamai technologies stock akam price resistance bearish outlook chart april 29

At askSlim.com we use technical analysis to evaluate price charts of stocks, futures, and ETF’s. We use a combination of cycle, trend and momentum chart studies, on multiple timeframes, to present a “sum of the evidence” directional outlook in time and price.

askSlim Technical Briefing:

The weekly analysis suggests that the stock has formed a megaphone pattern. The next projected intermediate-term low is due between the end of May and early June. Weekly momentum is positive.

On the upside, there is a Fibonacci extension zone from 108.23 – 110.09. On the downside, there is an intermediate-term support zone from 91.72 – 87.81. For the bears to gain control of the intermediate-term, we would need to see a close below 82.26.

askSlim Sum of the Evidence:

AKAM has formed a megaphone pattern on the weekly. The analysis suggests that the stock will trade in a range within the megaphone for the next several weeks. We would expect to see AKAM trade down to the intermediate-term supports beginning at 92 by the end of May. 

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