Speeding Information + Technology Arrows = Money

• Posted by Greg Harmon
• on January 31st, 2012

There are two companies in the technology space that are ready to break out of bullish flags. One Arrow Electronics, $ARW, reports earnings before the open Wednesday, the other Akamai, $AKAM, reports next week. Both should be on your watchlist for a short term trade.

Arrow Electronics, $ARW

Arrow Electronics, $ARW, broke above a triple top two weeks ago and stopped, consolidating in a bull flag under previous resistance at 42 from July. The Relative Strength Index (RSI) is bullish and has been trending higher, supporting more upside. The Moving Average Convergence Divergence (MACD) indicator is falling back towards bearish cross, though on close inspection it looks to glance off the bottom, averting the cross. The earnings reaction Wednesday before the market could be the perfect catalyst to break the flag. A break higher has a Measured Move to 46 and a break lower has nothing in the way of a retest at 38. Nearly 10% either way. Get up early for this one.

Akamai, $AKAM

The flag in Akamai, $AKAM, is not nearly as tight or pretty as the Arrow flag above. After the move higher to the 32 area, previous support ad resistance from the Summer, it finally has Bollinger bands tightening in preparation for a break. The RS has been trending higher and bullish for quite some time while the MACD is trending higher to wards a positive cross. Both are supporting a move higher. A break above 34 would trigger a Measured Move to 37 with a gap fill near 40 above that.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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