(For more on Okta, see Jim Cramer: Roku vs. Cat Defines This Incredible Two-Headed Market)
Okta is gearing up for their annual Oktane user conference. This year's Oktane21 will be virtual. McKinnon said that Okta plants introduce new product categories that will increase its total addressable market from $55 billion to $70 billion.
When asked about the recent SolarWinds attack, McKinnon said it just proves the importance of doubling up the protection on privileged accounts. This is especially important in dynamic cloud environments, he said, where servers and other resources are spinning up and shutting down dynamically to respond to demand.
McKinnon also said that in complicated environments, identification governance is becoming increasingly important. He said what large enterprises want is the ability to build their governance rules, then see a report with all of the exceptions that need to be fixed.
Let's check out the charts of OKTA again. We last reviewed the charts on March 17 and wrote that "The charts of OKTA are not bullish looking right now and weakness below $210 could mean we see further declines in the days and weeks ahead. I am in no rush to recommend purchases."
In this updated daily bar chart of OKTA, below, we can see that prices traded sideways last month and for most of the time trading below the cresting 200-day moving average line. The daily On-Balance-Volume (OBV) line has been flat/neutral in recent weeks suggesting a balance between aggressive buyers and aggressive sellers.
The Moving Average Convergence Divergence (MACD) oscillator is still below the zero line but it has crossed to the upside for a cover shorts buy signal - a buy signal when prices are in a downtrend.
In this weekly Japanese candlestick chart of OKTA, below, we see a less than robust picture. Prices are trading below the cresting 40-week moving average line and I see a number of red (read bearish) candles where the close of the week is below the opening of the week.
The weekly OBV line has been pointed down since December and suggests that sellers of OKTA are more aggressive. The MACD oscillator is pointed down towards the zero line.
In this daily Point and Figure chart of OKTA, below, we see that the software is projecting the $276 area as a potential upside price target. A trade at $209.59 or lower will probably weaken the picture.
In this first weekly Point and Figure chart of OKTA, below, we used high/low price data. Here the software is projecting a bearish price target of $103.
In this second weekly Point and Figure chart of OKTA, below, we used close only price data. Here the software projection is more positive with a $261 price objective.
Bottom line strategy: So far the $210 area has been acting as support. We identified this level in our March 17 review. Continue to watch and wait as one of our Point and Figure charts is very bearish and signs of aggressive buying have not appeared.