AKAM closes below its opening price unable to hold early session gains
Akamai Technologies Inc. (AKAM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
AKAM ended the week 2.38% higher at 100.42 after losing $0.58 (-0.57%) today, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading $0.61 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (AKAM as at May 22, 2020):
Friday's trading range has been $1.37 (1.36%), that's far below the last trading month's daily average range of $2.92. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for AKAM.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 99.62 (S1). After having been unable to move lower than 99.80 in the prior session, the share found buyers again around the same price level today at 99.89. The last time this happened on Tuesday, AKAM gained 3.37% on the following trading day.
While the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the nearby swing high at 101.94 where further buy stops could get activated. As prices are trading close to May's high at 103.15, upside momentum might accelerate should Akamai Technologies mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Akamai Technologies. Out of 776 times, AKAM closed higher 53.87% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 57.09% with an average market move of 0.83%.