For his second "Executive Decision" segment of Mad Money Monday evening, Jim Cramer spoke with Matthew Prince, founder, chairman and CEO of Cloudflare (NET) , the network and cybersecurity provider.
Prince said that Cloudflare is building a better network and continues its mission of execution and innovation. The company has created over 1,000 new products over the past two years, but is "still getting started," he said.
Cloudflare recently won a lucrative contract with the federal government. Prince said they won that deal because of their unique ability to provide fast, reliable and secure network services.
Prince also called out rival Amazon (AMZN) for charging too much for bandwidth access to their network. He said Amazon has done an amazing job driving down prices for customers, but when it comes to bandwidth, they're "gouging their customers."
Finally, when asked whether he'd invest in cryptocurrency given that digital wallets have become a favorite of hackers, Prince said that if those wallets used Cloudflare, he'd definitely feel comfortable using them.
We looked at NET back on August 16 and recommended that "The bulls are back in charge of NET and traders should look to buy available weakness. Risk to $99 for now. The $149 area is our price target."
Let's check the charts again.
In this updated daily bar chart of NET, below, we can see that prices have been in an uptrend the past 12 months. The most recent "leg" higher began in May. Prices are trading above the rising 50-day moving average line.
The On-Balance-Volume (OBV) line shows a positive trend the past year but looks flat since early August suggesting a balance between buyers and sellers.
The Moving Average Convergence Divergence (MACD) oscillator shows weakness since early July but appears to be "bottoming" lately.
In this weekly Japanese candlestick chart of NET, below, we can see that prices have moved higher the past two years. NET is trading above the rising 40-week moving average line.
The weekly OBV line is bullish and confirms the price gains we have seen since the IPO.
The weekly MACD oscillator is bullish and pointed higher but we have seen some narrowing in recent weeks telling us that the strength of the uptrend is beginning to wane.
In this daily Point and Figure chart of NET, below, we can see that the software is projecting a downside price target in the $111 area.
In this weekly Point and Figure chart of NET, below, we can see a near-by bullish price target of $135.
Bottom line strategy: Balancing and weighing the short and long-term charts and indicators of NET, I would recommend that traders continue to hold longs in NET. Raise stops to $115 from $99. Consider booking some profits at $135.