Okta’s stock has recently climbed over 2%, breaking a downward trendline that had kept it in check. This change in momentum hints at further potential gains, making it important to spot key price levels for possible pullbacks or reversals. Okta specializes in secure identity management, which affects how traders respond to its price movements. The stock often follows clear technical patterns and respects gap levels, making it appealing to traders who pay attention to these factors. Currently, there are two main resistance levels on Okta’s price chart. The first is around $91, where filling a gap could slow its rise. If Okta goes above this level, the next barrier is the $93.66 gap fill area, which could act as a reversal point. Even with a solid strategy, trading is unpredictable. Good risk management is crucial, especially when shorting a rising stock like Okta. It’s important to watch the stock’s behavior as it nears these resistance levels, requiring patience, discipline, and attention to technical indicators. As of December 11, 2025, Okta shows strength, pushing against a long-term downward trendline. This shift in momentum can provide opportunities, but we think it may lead to a short position instead of a continued long position. We’re anticipating a pullback as the stock approaches key resistance zones. The first level to watch is the gap fill around $91, which could be reached in the next few days. As the stock nears this price, derivative traders might think about buying puts that expire in late January or February 2026. This approach allows them to benefit if the stock fails at this initial resistance zone. If the rally pushes beyond this point, the more significant resistance is at the $93.66 gap fill. This level has a stronger historical significance and a higher chance of being a turning point. We see this as the key area to monitor for signs of exhaustion and a price reversal. It’s important to keep in mind that the market is sensitive to Okta due to major security incidents in late 2023, which led to long-term trust issues among institutional investors. Recent data from the U.S. Bureau of Labor Statistics shows that corporate spending on IT security is expected to slow in the first half of 2026, potentially impacting Okta’s growth. While last month’s Q3 earnings report exceeded expectations, the cautious guidance adds to our belief that this rally lacks solid foundational support. Given this situation, using a bear call spread might be a good strategy as Okta approaches the $93.66 level. A trader could sell the $95 strike call and buy the $100 strike call for January 2026, collecting a credit based on the expectation that the stock will stay below $95. Historically, Okta’s implied volatility tends to rise near resistance, making such credit spreads more appealing. Ultimately, patience is vital, as shorting into a strong upward move carries risks. We will wait for clear signs of weakness, such as a bearish engulfing candle or failure to hold above $91, before making any trades. This discipline is essential for managing risk when betting against current market momentum.

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