For his final "Executive Decision" segment of Mad Money Thursday evening, Jim Cramer checked in Nikesh Arora, chairman and CEO of cybersecurity company Palo Alto Networks (PANW) .
Arora said the work-from-home trend is here to say and they're seeing a big uplift in their remote security products. Customers now expect the same level of security they have in the office, no matter where they are.
He said discussions about cybersecurity have also moved beyond just the IT department. They are now happening in boardrooms and the White House, as our entire country needs to get serious about security.
When asked about the semiconductor shortage, Arora noted that Palo Alto has been shifting away from hardware devices and into software, which is easier to deliver and maintain, and also doesn't require more chips for every customer.
Palo Alto is also partnering with access providers like Comcast (CMCSA) and Verizon Communications (VZ) to provide reliable access to all of their security products.
PANW is trading higher Friday in reaction to their latest earnings beat and strong guidance. Let's check on the charts.
In the daily bar chart of PANW, below, we can see that prices made a high in late February. In our review of Feb. 22 we wrote that, "If you have a nice profit on your long position in PANW you might consider taking some profits ahead of earnings." PANW declined from late February to late March. Prices bounced into the middle of April and then declined to a higher low in the middle of May. PANW gapped higher today and is trading above the 50-day and 200-day averages. Friday's gains should soon turn the slope of the 50-day line positive.
The On-Balance-Volume (OBV) line is turning upward from a higher low and tells us that buyers of PANW are once again more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is close to crossing above the zero line for a fresh outright buy signal.
In the weekly Japanese candlestick chart of PANW, below, we can see an improving picture. Prices are trading above the rising 40-week moving average line. Recent candles show lower shadows as traders reject the lows.
The OBV line has moved sideways as PANW has corrected since February -- a good sign. The MACD oscillator is pointed down but has started to narrow.
In this weekly Point and Figure chart of PANW, below, we can see a potential longer-term price target in the $450 area. Strength above $376 should be a fresh breakout.
Bottom-line strategy: PANW is back. Rebuild your long position if you took some profits back in February. Risk to $315 now. $405 and then $450 for now.
