Akamai Technologies Stock Trades Near Key Levels Ahead of Earnings

Akamai Technologies, Inc. will take its place in the earnings confessional after the close on Tuesday, May 2

May 1, 2017 at 2:34 PM
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Tech earnings are in focus this week, with cloud firm Akamai Technologies, Inc. (NASDAQ:AKAM) among the many names set to report. Ahead of AKAM's results -- due out after tomorrow's close -- the shares are trading higher along with the broader Nasdaq Composite (COMP), last seen up 1.2% at $61.67. While the tech shares have historically been volatile in the session subsequent to reporting, there are several levels in place that could disrupt any potential post-earnings price swings for AKAM stock.

Looking over the past six quarters, it's hard to tell where AKAM stock could be headed after earnings. The security has closed higher in the session subsequent to reporting three times, averaging a gain of 13.3%. Conversely, AKAM has averaged a single-session post-earnings loss of 13.4% in three quarters since October 2015. This time around, the options market is pricing in a 13.5% move for Wednesday's trading.

However, any moves to the downside could be contained near $58 -- a 38.2% Fibonacci retracement of the stock's 2012-2015 surge, and a level that caught AKAM's decline from its Feb. 7 high at $71.34. Since bouncing from here in early April, the shares of AKAM are up more than 6.3%.

Below here is peak put open interest at AKAM's May 57.50 strike. This area could also serve as short-term support, as the hedges related to these bets begin to unwind. This is neighborhood is also home to AKAM's 320-day moving average, which has turned upwards, and is catching up to the stock's price. This trendline served as a springboard for the security from July 2012 through August 2015.

Meanwhile, any sharp swings to the upside for Akamai Technologies, Inc. could run out of steam in the $65-$68 range. Not only is this home to a 23.6% retracement of the stock's three-year journey to its May 2015 14-year peak and its year-to-date breakeven mark, but it's also the site of heavy call open interest at the May 65 strike. 

AKAM stock daily price chart may 1


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