For his second "Executive Decision" segment of Mad Money Wednesday night, Jim Cramer spoke with Todd McKinnon, chairman and CEO of Okta (OKTA) , the cybersecurity company that just posted 37% revenue growth.
McKinnon said you need a strong identity management system at the heart of your security plan and that's what Okta provides. Identity is proving to be a challenge for many companies, he said, which is why we're seeing so many attackers exploit legacy systems.
The good news is that companies are rapidly moving to the cloud and deploying modern systems that are built on a zero-trust principle.
Let's check on the Okta charts.
We looked at OKTA on April 8 and wrote that, "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."
In the daily bar chart of OKTA, below, we can see that the shares held the $210 area in March and are making a higher low in May. OKTA just closed above the 50-day moving average line and the 200-day moving average line.
The On-Balance-Volume (OBV) line shows lows in March and May and strength above the April high will be positive. The Moving Average Convergence Divergence (MACD) oscillator made a higher low in May than March and is crossing to the upside for a cover shorts buy signal.
In the weekly Japanese candlestick chart of OKTA, below, we see a mixed to positive picture. Prices have traded sideways since November in a large triangle-like pattern. OKTA is trading just above the rising 40-week moving average line.
The weekly OBV line shows a long three-year rise with the past six months being steady. The weekly MACD oscillator is still above the zero line and getting close to a fresh outright buy signal.
The daily Point and Figure chart of OKTA, below, shows only a price target of $251 but there is no nearby chart resistance until the $280 area.
In this weekly Point and Figure chart of OKTA, below, we can see that the software is projecting the $442 area as a potential target.
Bottom-line strategy: Traders could probe the long side of OKTA at current levels risking to $214. Our first price target is $285.