For his Executive Decision segment of "Mad Money" Wednesday, Jim Cramer spoke with Todd McKinnon, co-founder and CEO of Okta Inc. (OKTA) , the identity management provider that has seen its share price double so far in 2019.
McKinnon said identity management is vital for every company in the information age. In the old days, your company built a network inside your office and simply added a firewall between you and the rest of the world. But today's companies have multiple offices, data centers and clouds as well as countless remote employees, partners and suppliers. All these disparate resources require systems that can track people, devices and applications no matter where they may be located.
For organizations such as Major League Baseball (MLB) that want to stream out-of-market games to their subscribers, Okta provides solutions that don't require passwords or tokens for fans and are easy to build for MLB's developers. For companies such as Fox, which has thousands of different collaborators working on its productions, Okta provides vital management and tracking of who has access and who doesn't.
Today's companies need systems that are flexible, accessible and secure. McKinnon said, and that's what Okta provides. Let's check out the latest charts of OKTA to see if they are flexible to the upside.
In this daily bar chart of OKTA, below, we can see how prices have moved over the past 12 months. OKTA was in a strong uptrend from December to July. From June to August we can see how prices rolled over and then declined into late September. In October OKTA made a slightly higher low and a new rally phase kicked in. This month prices broke above the October highs to establish a new uptrend. Prices are above the rising 50-day moving average line and the rising 200-day line.
The daily On-Balance-Volume (OBV) line has been improving from September and tells us that buyers of OKTA have become more aggressive, with heavier volume traded on days when the stock has closed higher. The Moving Average Convergence Divergence (MACD) oscillator has crossed above the zero line in the past week to generate an outright go long signal.
In this weekly bar chart of OKTA, below, we can see that prices have really rewarded investors over the past two years plus. Prices are back above the rising 40-week moving average line. The weekly OBV line is improving again and the MACD oscillator is poised for a cross to the upside from above the zero line -- a fresh outright buy signal.
In this first Point and Figure chart of OKTA, below, we can see a pattern of accumulation (buying) and a potential upside price target of $139.
In this second Point and Figure chart of OKTA, below, we used weekly close-only data to construct a longer-term picture. Here we have a potential price target in the mid- $150s.
Bottom line strategy: OKTA might pull back slightly toward $120 in the near term to give traders a buying opportunity. If you use that weakness to buy, then use a sell stop below $110. Our price targets are $139 and $154.