Testing the Taper Rally

The taper rally was impressive and took many components of the broader indices back up to or just through important resistance levels and key moving averages. Now follow-through price action confirms or repudiates the validity of Wednesday's market strength.

Akamai Technologies (AKAM) has been trading in a sideways channel for the past two months. It is testing upper-channel range and its 50-day moving average, and the lower range is roughly defined by the 200-day moving average. The Relative Strength Index moved above its centerline this month and Moving Average Convergence/Divergence made a bullish crossover in November. There have been several positive volume bars that have exceeded the 50-day average, and the Money Flow Index, a relative strength measure of money flow, has crossed above its centerline. The stock is a buy after a close in upper-candle range above channel resistance, with an initial stop under the 200-day average and a target price that fills the October gap....195 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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