Okta Post Earnings: Brief Technical Analysis and Trade Plan (UPDATED on 07 June, 2022)
- OKTA stock rallied big on the day before earnings and had a further 18% rally upon earnings, which it mostly sold off. At this stage, based on VWAPs, the volume-weighted average price (VWAP), we aim to fill a buy order with a 4 to 1 reward vs risk ratio. Always trade at your own risk.
- Update, the trade plan was a winner. As shown in the video below, the Long entry at 92.34. Stop Loss at 89.94 would have not been filled (price did not reach the stop). Take profit at 102.33 was filled on 08 June. The 4 to 1 reward vs risk trade is a winner. Trader risked 2.71% to aim for 10.82% profit. In summary, 10.82% gained in 2 days for this post earning trade idea presented yesterday before market opened. Stay tuned for more technical analysis and trade ideas by ForexLive.com and we hope to bring you as many winners as we can.
OKTA Technical Analysis by Chart Patterns
For OKTA earnings on June 2, 2022 (after market close at 5:00 PM Eastern time), ForexLive.com presents the following technical analysis chart images and videos, showing the stock’s past move and behavior. In certain cases, we further attempt to predict the upcoming post earnings stock move and trading opportunities by analyzing OKTA’s price trend, chart patterns, volume, momentum indicators, oscillators, moving averages and support & resistance levels.
The options market is pricing 11.3% move for Okta stock for this Q1 2022 earnings report.
OKTA Technical Analysis by Price Trend
- We look at OKTA’s general direction or trend, as defined by its higher swing highs and lower swing lows on the following timeframes:
- Monthly candles - OKTA stock is trending down with 5 consecutive bear monthly candles up to the end of March 2022
- Weekly candles - the stock may be starting to build its horizontal base in the past 2 weeks, following 6 weeks of consecutive declines.
- Daily candles - OKTA has been trading sideways between apx $77 and $87 for the past 9 daily trading days (14 calendar days)
OKTA Technical Analysis by Chart Patterns
On the weekly timeframe, OKTA stock has 4 to 5 touch points at the top of the channel shown in the image below, and about 4 touch points on the channel’s lower band. Algorithms and professionals may this bottom of the range as a legitimate place to bet on a Long trade, with a stop loss close (but not too close) below and take profit potential that is high as OKTA may get back after earnings to the middle channel at apx $140, which would be 64% higher than the current stock price of $84.43
OKTA Technical Analysis by Volume
By looking at the Volume Profile, also known as the Market Profile, a charting study that shows trade activity over a certain length of time and at “market accepted”, popular price levels, OKTA shows us that price may be finding very strong support at the VAL (Value Area Low) just below $76 and can go to the next price level, the PoC (Point of Control), shown as the red line in the image below, at apx $130
OKTA Technical Analysis Momentum Indicators
The Momentum Indicator (MOM) is a leading indicator that measures the pace of change of a security. It compares the current price to a prior price from a previous time period. On the daily timeframe, as the below chart image shows, the momentum of OKTA stock is rising and this can support accumulation before the next big rise.
OKTA Technical Analysis by Oscillators
The most popular oscillator indicator is the RSI (Relative Strength Index), and in technical analysis, this indicator examines the size of recent price fluctuations to determine if a stock or other asset is overbought or oversold.
The RSI can further be used by examining the cross over or cross under its moving average, to signal on recent momentum, and the below chart shows us OKTA is still in oversold territory (supporting a bullish move next as there might be lack of sellers) as well as having most recent increased, relative buying pressure.
OKTA Technical Analysis by Moving averages
Moving averages are used to assess the trend direction of stocks. It's determined by summing all the data points for a period and dividing by the number of periods.
Moving averages provide traders trading clues and the below chart for OKTA shows that price is reclaiming its 9 EMA moving average, which is quite a popular moving average. If OKTA is about to close its daily candle above the blue line, that supports a LONG position for OKTA earnings. If the price today is about to close below the 9 EMA, then that would support a short or no trade.
OKTA Technical Analysis by Support and Resistance Levels
Support is a low stock price level, whereas resistance is a high level. When a stock's price lowers, traders buy. Reactionary purchasing stops a stock's decline and starts its rise.
As the below technical analysis of OKTA shows, the resistance above is the round number of $100. This implies that, should OKTA rally after earnings, that resistance can also be a “magnet” pulling people to hold on and not sell below, since they believe OKTA stock price will get there.
On the lower side, the low of March 2019 is an important support.
Trade OKTA Earnings at Your OWN RISK
Technical analysis is at times somewhat limited before earnings since new information, like poor revenue guidance announced at the earnings, can “restart” most of the technical indicators shown on the chart. ForexLive.com presents the above for informational and research considerations only, and the risk of trading OKTA on its earnings is solely on you. However, if you do, then good luck. We hope that we can help with some of our analysis perspectives and options.
