OKTA closes above its opening price after recovering from early selling pressure
Okta Inc. (OKTA) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
OKTA finished the week 4.85% higher at 121.05 after losing $2.25 (-1.82%) today on low volume, but still strongly outperforming the S&P 500 (-3.37%). Trading up to $4.62 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Tuesday, OKTA actually lost -5.00% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (OKTA as at Mar 27, 2020):
Friday's trading range has been $10.34 (8.57%), that's slightly below the last trading month's daily average range of $10.79. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for OKTA. Prices continued to consolidate within a tight trading range between 111.69 and 127.99 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, four candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man.
After trading down to 116.01 earlier during the day, Okta bounced off the key technical support level at 118.58 (S1). The failure to close below the support could increase that levels significance as support going forward. The stock closed back below the 200-day moving average at 122.10. The share found buyers again today around 116.01 for the third trading day in a row after having found demand at 116.97 in the previous session and at 116.95 two days ago.
OKTA shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might speed up should prices move above the nearby swing high at 127.99 where further buy stops could get triggered.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 50" stand out. Its common bearish interpretation has been confirmed for Okta. Out of 8 times, OKTA closed lower 87.50% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 75.00% with an average market move of -8.73%.