Options Traders Nail AKAM Stock's Post-Earnings Move
Options traders are cheering well-received earnings from Akamai Technologies, Inc. (NASDAQ:AKAM), with shares of the cloud stock up 7.2% this morning at $68.25. Call buying was extremely popular leading up to the event, evidenced by a 10-day call/put volume ratio of 4.63 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), a reading that ranks in the high 88th annual percentile.
Looking closer, calls accounted for the four largest increases in open interest during the past two weeks, with the weekly 2/9 70-strike call leading the way. The 66-strike call from the same series was also popular, as were the traditional front-month February 67 and 70 calls. All of these contracts saw buy-to-open activity, indicating traders were betting on an upside move from AKAM stock.
Analysts, meanwhile, are jumping on the bullish bandwagon this morning. A flurry of price-target hikes have come through since yesterday's close, with the highest mark of $84 coming from Craig-Hallum. Still, 11 of the 16 brokerage firms tracking the security say it's a "hold" or worse, so there's seemingly plenty of room for more bullish analyst attention.
Turning to the charts, the $68-$72 range has acted as technical resistance for Akamai Technologies' past two breakout attempts, but more recently the tech stock has enjoyed the support of its fast-rising 50-day moving average. Even before today, the security was up almost 35% in the past six months alone, thanks in part to a vote of confidence from the hedge fund community in December.
