NEW BEARISH Plays
Akamai Technologies - AKAM - close: 34.06 change: -0.72
Stop Loss: 35.05
Current Gain/Loss: unopened
Entry on April -- at $--.--
Listed on April 04, 2013
Time Frame: Exit prior to earnings on April 24th
Average Daily Volume = 3.9 million
New Positions: Yes, see below
Why We Like It:
AKAM in helps companies and websites deliver content more quickly across the Internet. Unfortunately it looks like investors are in a mood to sell the stock. Shares were crushed back in early February following AKAM's earnings report. The stock did see a big bounce back but since then investors have been selling into strength. AKAM has also become a popular stock to short. The most recent data listed short interest at about 9% of the 172.25 million-share float.
Today saw AKAM underperforming the market with a -2.0% decline and what looks like a breakdown from a three-week trading range. Traders might want to launch bearish positions now. I am suggesting we wait for AKAM to trade below the February low ($33.55). We'll use a trigger to launch bearish positions at $33.45. If triggered our target is $30.15. More aggressive traders could aim lower.
The Point & Figure chart for AKAM is bearish with a $25.00 target.
Note: because of AKAM's high short interest you might want to trade the put option instead where you can limit your risk to the initial cost of the option.
Trigger @ 33.45
Suggested Position: short AKAM stock @ (trigger)
- (or for more adventurous traders, try this option) -
buy the May $30 PUT (AKAM1318Q30) current ask $0.70