This past Friday night for his "Executive Decision" segment, Jim Cramer spoke with Todd McKinnon, co-founder and CEO, Okta Inc. (OKTA) . Okta is one of Cramer's "cloud princes." McKinnon said Okta is seeing three secular tailwinds pushing in their favor. He said more companies are digitizing their operations, embracing the cloud and paying more attention to security issues. Let's put aside the fundamentals a while and concentrate on the charts and indicators.
In this daily bar chart of Okta, below, we can see a mixed picture. Prices are below the cresting 50-day moving average line and above the rising 200-day average line. Prices bounced from around $55 which is in the upper half of the $59-$49 support area from June to the middle of August. The daily On-Balance-Volume (OBV) line has not declined much this month suggesting that sellers of OKTA have not been that aggressive. In the lower panel the Moving Average Convergence Divergence (MACD) oscillator has begun to narrow towards a potential cover shorts buy signal.
In this updated daily candlestick chart of OKTA, below, we can see two doji patterns from Thursday and Friday. A doji is a pattern that happens when the open and closing price for the day is the same or nearly the same. This very old method of analyzing the markets rests on the relationship between the open and the close - or a daily battle between the bulls and the bears. The bulls are in control if the close is higher than the open and the bears are in control if the close is lower than the open. When the open and close are the same it means there is a balance and this can mark a turning point.
In this weekly bar chart of OKTA, below, we can see that last week's bar shows that prices closed well off the low of the week. The weekly OBV line is pointed down and the MACD oscillator has crossed to a take profits sell signal.
In this Point and Figure chart of OKTA, below, we can see a possible longer-term downside price target of $36 but the left side of the chart shows the volume at price data which suggests good support below $56 down to $48.
Bottom line strategy: When the stock market sinks you need to keep you eyes on the stocks that go down less. These names can be the next leaders as someone was probably buying them on the pullback. I would put Okta is that category.