In his Executive Decision segment of Tuesday's "Mad Money" program, host Jim Cramer spoke with Doug Merritt, president and CEO of Splunk (SPLK) , a data and analytics company that's hosting its 12th annual user conference this week.
Merritt said Splunk has seen 10 consecutive quarters of double-digit growth in its cloud business. He also noted that cybersecurity represents 50% of Splunk's business. Merritt said one of the company's newest cybersecurity features helps companies automatically redact sensitive and personally identifiable information from its data as it's loaded into the Splunk platform. That way, companies and consumers alike can be assured their information won't be leaked or hacked.
Merritt said the government also continues to be a key sector for Splunk, as it's imperative that government agencies modernize and keep their data safe.
We last reviewed the charts of SPLK on June 2 and wrote, "Aggressive traders could go long SPLK today ahead of the numbers because the charts and indicators suggest a good bounce to the upside. Risk to $111."
Let's see how the charts look today.
In this daily bar chart of SPLK, below, we can see that our June 2 buy recommendation has worked out nicely for those subscribers who decided to follow it. Today we can see that prices are still pointed up as they trade above the 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line has been firm since early June and has made a new high for the move up to confirm the price gains. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a fresh outright buy signal.
In this weekly Japanese candlestick chart of SPLK, below, we can see that prices have rallied above the 40-week moving average line. The slope of the line has not turned positive but that should happen soon. The weekly OBV line is bullish and so is the MACD oscillator.
In this daily Point and Figure chart of SPLK, below, we can see a potential upside price target in the $225 area.
In this second Point and Figure chart of SPLK, below, we used weekly price data and a five-box reversal filter. Here the software is projecting a $275 price target.
Bottom line strategy: If you are still long SPLK from June 2, great. Traders could go long SPLK at current levels or add to existing longs. Risk to $143. The $225 area is our first price target. Our longer-term target is $275.
