Investors must be prepared for more ugly headlines, Jim Cramer cautioned viewers of his Mad Money program Thursday night. "We're likely to see many more cases of the coronavirus, as well as news of failed drug trials and vaccines -- and countless bankruptcies. But once the smoke clears, and it will clear eventually, there will be companies worthy of investing in," said Cramer.
The stay-at-home economy is here to stay and cybersecurity will be more in demand than ever, which means stocks like Okta, Inc. (OKTA) will be a buy.
Let's check out the charts of OKTA.
In this daily bar chart of OKTA, below, we can see that prices corrected lower in recent weeks as the broad market slumped. OKTA broke its late September low but only on an intraday basis and then prices rebounded. I take this price action as a sign that there is strong underlying demand for the shares of OKTA. Prices are now poised to test and probably close back above the 50-day and 200-day moving average lines.
The On-Balance-Volume (OBV) line shows only a small decline from the middle of February telling us that sellers of OKTA have not been overly aggressive in selling in recent days.
The Moving Average Convergence Divergence (MACD) oscillator has been narrowing and is close to an upside crossover and cover shorts buy signal.
In this weekly bar chart of OKTA, below, we can see what looks like a large double top formation. For a formation like this to become "complete" we need to close below the low or trough between the two peaks. That condition has not been fulfilled so far so the conclusion for now is that prices have been in a large sideways consolidation pattern.
OKTA is below the 40-week moving average line but that could change quickly. The weekly OBV line shows only modest selling since August, and the MACD oscillator is still above the zero line in positive territory.
In this Point and Figure chart of OKTA, below, we can see that a potential price target of $178 is being projected.
Bottom line strategy: It may take extra work to find good looking charts and positive stories, but OKTA fits the bill right now. Aggressive traders could go long OKTA at current levels risking below $99 for now.