For his "Executive Decision" segment of Mad Money Friday night, Jim Cramer spoke with Gary Steele, chairman and CEO of Proofpoint (PFPT) , the cybersecurity company that beat on earnings when it last reported, but offered analysts only tepid guidance for the remainder of the year.
Steele said people are being defrauded every day and the cyber criminals are winning the battle as attacks are getting more sophisticated, using more elaborate social engineering. Even the coronavirus is being used as a lure because people are desperate to learn more.
Steele added that the cybersecurity business is made up of many discrete niches and Proofpoint is a leader in their niche. As the November election gets closer, Steele said they expect to see a marked rise in geopolitical targeting and attacks.
Let's check out the charts of PFPT.
In this daily bar chart of PFPT, below, we can see that prices have failed to overcome the $130 area the past year. Rallies failed in April, July, October and last month. PFPT is below the rising 50-day moving average line now and testing the flat 200-day line.
The On-Balance-Volume (OBV) line has been weakening since late January and tells us that sellers of PFPT have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has been in a bearish mode since late January and is close to crossing the zero line for an outright sell signal.
In this weekly bar chart of PFPT, below, we can see the rally failures around $130 stretch back even further. Prices are just above the flat 40-week moving average line.
The weekly OBV line has been firm but erratic and the MACD oscillator is barely above the zero line.
In this Point and Figure chart of PFPT, below, we can see that a $111 price target is projected.
Bottom line strategy: Cyber attacks will surely be on the rise but that does not look like it will translate into high prices for PFPT just yet. I would look for a $115-$130 trading range to continue a while longer.