CYBR (Long) - Cybersecurity charts are too good right now
Fundamentals
Technicals
Trade
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- I have recently published a trade idea for another cybersecurity stock (
QLYS
) and seems to have become a theme. The cybersecurity sector is rallying on the back of geopolitical tensions and some stocks, like
CYBR
have put some lovely technical setups
- The fundamentals here are not as pristine as in the case of
QLYS
, but they are still robust
- The revenue growth is strong and has remained robust and consistent; the sales have grown nearly 1500% in the past decade, from 47m to $700m
- The company has a healthy balance sheet with a reasonable level of debt
- The valuation is elevated, but that is to be expected for stocks with a lot of momentum. However, here I am attracted more to the technical setup
Technicals
- Anyone who has seen my other trade ideas knows that a solid base with a high-volume breakout is a vital part of my analysis. Here, we have a base which has been forming over a three-year period. Usually, the longer the period, the more robust the base.
- Last week, the base broke on a release of strong earnings followed by a higher-than-average volume, and most importantly, we have seen follow-through in price, suggesting the breakout likely has legs
- Other indicators suggest continuing momentum and the overall sector is also remaining strong and in support of the rally
Trade
- The price is a bit far off from the breakout point, so it currently does not offer the most ideal entry point. I would probably suggest waiting for a pullback or at least a consolidation as the stock is slightly extended on the daily.
- However, for someone with a more long-term outlook, this price represents an entry as good as any
- Suggested stop-loss is at the breakout point. A caveat would be if the stock fell back and through the breakout point.
- One should also watch for the performance of the overall industry. For that, I can recommend the cybersecurity ETF
HACK
Follow me for more analysis & Feel free to ask any questions you have, I am happy to help
If you like my content, Please leave a like, comment or a donation, it motivates me to keep producing ideas, thank you :)