In his second "Executive Decision" segment of "Mad Money" Thursday night, our own Jim Cramer sat down with Gary Steele, chairman and CEO of Proofpoint (PFPT) . PFPT is a cyber security company which saw its shares fall 15% last week after reporting a 12-cents-a-share earnings beat.
Steele said cyber security remains a great business and the threat landscape is only getting tougher for most companies. He said Proofpoint's business is being driven by the cloud and also international demand. Let's check out the charts too.
In this daily bar chart of PFPT, below, we can see how prices rolled over from March to August before the decline picked up speed on the downside. In August and October we can see that rallies to the declining 50-day moving average line failed. The slope of the 200-day moving average line has started to turn lower.
The daily On-Balance-Volume (OBV) line has been in a decline from June and tells me that sellers of PFPT have been more aggressive.
In the lower panel is the 12-day momentum study. From September to October the momentum study rises showing that the decline has slowed. This is a bullish divergence and could foreshadow firmer prices ahead.
In this weekly bar chart of PFPT, we can see bearish signals. Prices are below the weakening 40-week moving average line.
The weekly OBV line is bearish and so is the weekly Moving Average Convergence Divergence (MACD) oscillator.
In this daily Point and Figure chart of PFPT, below, we can see a big decline but also a potential upside price target of around $108.
In this weekly Point and Figure chart of PFPT, below, we can see a downside price target of $43.
Bottom line strategy: In the short to intermediate term we could see PFPT rebound to retest the underside of the declining 50-day moving average line again. Longer-term, PFPT could retest and possibly break its October low.