What did Jim Cramer have to say about Okta (OKTA) when the cloud stock was brought up during the Mad Money Lightning Round Thursday evening? "When great tech stocks are down 20%, you need to buy them. You should own Okta, Cramer replied."
When we looked at the charts of Okta on March 8 and concluded, "Yes, OKTA has made a good decline but the indicators and charts suggest further weakness is possible. Continue to avoid the long side of OKTA."
Let's visit with the charts again.
In the updated daily bar chart of OKTA, below, we can see that the shares have spent a lot of March trading below the cresting 200-day moving average line. The slope of the 50-day line is negative.
The On-Balance-Volume (OBV) line is pointed down telling us that sellers of OKTA have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator is bearish. Chart support can be seen in the $225-$195 area so weakness below $210 or the halfway point of support is not a good sign and could precipitate further weakness.
In the weekly Japanese candlestick chart of OKTA, below, we can see a weakening picture. Prices are trading below the 40-week moving average line.
The weekly OBV line is pointing down and tells us that sellers are being more aggressive with heavier volume being traded in weeks when prices close lower. The MACD oscillator recently turned sharply lower for a take profit sell signal.
In this daily Point and Figure chart of OKTA, below, we can see a projected downside target in the $117 area.
Bottom-line strategy: The charts of OKTA are not bullish looking right now and weakness below $210 could mean we see further declines in the days and weeks ahead. I am in no rush to recommend purchases.