Saturday 17 March 2012

AKAM - Highly Profitable Tech

AKAM continues to be one of the more quality tech companies out there in my view. It has seen a great run upward since last Octobers low.

AKAM: up almost 100% in just 6 months

Near term, AKAM looks set to begin a new up cycle this week, first target would be upper bol' of 38/39. A move above 40 might suggest the big 50 is possible by the next earnings sometime in April.

Unlike much of the tech' sector, it AKAM seems to be much more reliable. Profit margins are 17%, no debt, some cash, and a PE of around 20.  The PE is certainly not in the cheap category, but clearly, a move to around 50 would only take it to around 25.

AKAM will be a good indicator of what sort of mood the wider market is in next week. If we see AKAM break over 38..even 40, we'll know the low vol' melt up might easily continue to at least April.

CAT - still purring

Caterpillar remains one of my favourite companies. Its a real company, makes a real product, whose products do REAL work. Not some paper pushing derivatives nonsense like many of the financial institutions out there.

CAT, daily, near term

CAT is seeing a nice uptrend right now, and looks set to break the recent high of 117. If that can be done, then a move to around 125/130 would be 'best guess' within the next 2-4 months. Especially, look at the blue-bar MACD, it is due to go positive cycle this coming Monday/Tue. It is one bullish sign for the underlying market.

CAT, weekly, 3 year history

A break above 120 will be important in the coming 1-4 weeks. Only a break below about 85 - or 'doomer level' 70, would make for a new bigger bearish outlook.

Good wishes!

A glimpse into next week

Just one chart to consider to begin the weekend

IWM - weekly, near term

Next week/end of March target: 86/87

That would make for around sp'1440/60, and then maybe a pullback of a few percent (if that!).