For his third and final "Executive Decision" segment of Wednesday's Mad Money program, Jim Cramer sat down with Todd McKinnon, chairman and CEO of Okta (OKTA) , the identity and access provider.
McKinnon said the fundamentals at Okta haven't changed. Companies still need the right technology for their hybrid work environments and to build new digital products and services for their customers. Identity management sits at the center of those trends.
Okta is helping to pioneer so-called "zero trust" environments, where every transaction is validated to ensure that users only have access to what they should. Gone are the days where security can be left to a firewall, he said, everything needs to be built with zero-trust credentials.
In our last technical review of OKTA on June 3 we concluded that, "I would look for OKTA to retest its May lows in the days and weeks ahead. I fail to find enough technical clues to recommend the long side of OKTA, even on weakness. Avoid the long side for now."
Let's check the charts again.
In the daily bar chart of OKTA, below, we can see the recent rebound in the share price and a shallow pullback. Prices are still below the declining 50-day moving average line and below the bearish 200-day moving average line. Trading volume has been extremely heavy.
The daily On-Balance-Volume (OBV) line has moved up sharply. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a cover shorts buy signal. An outright buy signal will take more time.
In the weekly Japanese candlestick chart of OKTA, below, we can see some improvement but perhaps not enough to move the needle. Prices are in a downtrend and trades below the bearish 40-week moving average line.
The weekly OBV line has turned up and the MACD oscillator has narrowed.
In this daily Point and Figure chart of OKTA, below, we can see that prices reached an upside price target of $98.
In this weekly Point and Figure chart of OKTA, below, we can see that prices reached a downside price target in the $121 area.
Bottom-line strategy: I would continue to stand on the sidelines of OKTA for now. A pullback to the $90 level may be a buying opportunity. Remain patient.
