Out Fox The $treet

After the close on Wednesday several technology firms reported earnings with vastly different stock reactions. In the tech world, earnings season tends to be a moment of wild swings. The stock reaction can be nothing more than expectations getting out of hand and investors turning too bearish or the result of a shift in the business fundamentals. Either way, the moves highlight the problems with investors getting too bullish or bearish as most stocks tend to eventually revert to the mean average. In the after hours action, investors got a prime example of what happens when a market leader makes a move in one direction. The likelihood exists that the stock will revert to the mean eventually and no better time exists than an earnings report. This exact scenario occurred in the earnings reports for Akamai Technologies ( AKAM ) , Equinix, Inc. ( EQIX ) , and Fusion-io, Inc. ( FIO ) on Wednesday night. Read the full article at Seeking Alpha. Disclosure: No positions men...

Limelight Networks ( LLNW ) is a leading content delivery network provider sometimes seen as a sexy play on the explosive growth of mobile and connected devices and the move into the cloud. The company recently reported Q1 numbers that showed incredible revenue growth with over 100% growth in mobile internet and tablet computing revenue, online video platform, and site and application acceleration services. Read the full story at Seeking Alpha .  Disclosure: No position in LLNW. Please review the Disclaimer page. 

While the US tech sector its a rough patch, some Chinese tech stocks like China Cache (CCIH) are looking very bullish technically. Networking stocks like F5 Networks (FFIV) and Riverbed Tech (RVBD) along with just about all of the optical equipment stocks and even the US CDN leader Akamai (AKAM) have fallen below the 200ema. Typically this is a very bearish sign especially if the 20/50emas dip below the 200 as well. CCIH on the other hand has regained the 20/50ema. The 200ema isn't active yet since the company hasn't been public that long. CCIH is the leading CDN provider in China, but has dropped dramatically from its post IPO high near $35 all the way back in November. Along with the general weakness in the Chinese market that started back then, they also faced the scare that the COO leaving signaled internal issues at the company. Based on the Q4 results those issues were put to rest and the stock has been basing since then. From looking at the chart below it appears t...

Today Limelight Networks (LLNW) announced that the United States Court of Appeals for the Federal Circuit had affirmed a District Court grant of LLNW's motion for judgement for noninfringement of Akamai's (AKAM) '703 patent. Basically confirmation that at the very least, AKAM can not prove that LLNW infringed on its patent. Considering the stock action of late its surprising that this news was bullish for LLNW. Eight straight down days sure suggested negative news on the horizon. Highlights the issues with tech trading. Sure it might have gotten an investor out of LLNW much higher then the intraday lows sub $6, but for all the wrong reasons. The market clearly shot first without any logical reason. It clearly wasn't apparent that LLNW would lose this appeal. In the low $6s, LLNW provides a opportune entry point into Content Delivery Networks (CDNs) and the move to cloud computing. As pointed out a few weeks back by Stone Fox, LLNW still needs to prove they can not o...

Limelight Networks (LLNW) has garnered a lot of attention lately as the Content Distribution Network (CDN) providers have been front and center in the media whether with the Netflix (NFLX) deal with Level 3 (LVLT) or the Comcast dispute with LVLT. Not to mention that the CDN sector is hot based on higher demands for data on internet whether via streaming videos from NFLX, mobile video or cloud storage. LLNW grabbed our attention because they are a relatively cheap tech stock in a hot sector. The major caveat being they are cheap based on revenue multiples but not so much based on profits. The key to stock gains will be whether they become a co-leader in the CDN market or remain a second fiddle to Akamai (AKAM). AKAM is the 800lb gorilla in this sector having a market cap some 13x the size of LLNW. Revenue is only 4-5x the expectations based on 2011 estimates. Their in lies the valuation proposal or trap depending on your point of view. Tech has long had a history of 2nd tier compa...