Start of the bull run for cyber security stocks?

Ming Jong Tey Independent Analyst

2021 Week 1 market recap

On Monday (4 Jan 2021), I shared my view on Cathie Wood (ARK Invest’s CEO & CIO)’s warning on market correction and explained the two popular different types of characteristics of market movement before the market correction that we can anticipate.

The bullish case is currently unfolding with the four major indices (Dow Jones, S&P 500, NASDAQ and the Russell 2000) hit all time high and in a climatic run up. This coincides with the parabolic run up for Bitcoin, which is an indicator for a risk-on environment.

So, the next thing I am watching closely is a potential overbought and a change of character bar with increasing of the supply. Stop loss have been raised and tightened for swing trading positions as I am on the conservative side to anticipate for a market correction.

Beginning of the Bull Run for Cyber Security sector?

In the early Dec 2020, FireEye, a top cyber security firm, said it was hack. About a week later, Solarwinds, an IT firm that provides software for companies like the Fortune 500 and the US government was also reported being hacked. The series of the hacking events stir up huge interest back to the cyber security stocks.

Is the rally for cyber security stocks sustainable? Or is it just for swing trading by tapping into the hacking news as catalyst? How about position trading (aka investing) for this sector? To answer these questions, let’s take a closer look by analyzing the top 4 ETFs such as HACK, IHAK, BUG, CIBR and some of the outperforming stocks like NET, ZS, CRWD, OKTA, TENB, VRNS, CALX, ALRM, SAIL, RPD, FEYE and PANW. Watch the video below:

Timestamps

1:13 HACK (ETF Managers Trust Prime Cyber Security ETF).
1:43 IHAK (Ishares Trust Cybersecruity and Tech ETF).
2:10 BUG (Global X FDS CyberSecurity ETF).
2:30 CIBR (First Trust Exch Traded Fund 2 Nasdaq CyberSecurity ETF).
4:00 HACK Rounding Bottom Accumulation Structure.
11:10 NET (CloudFlare).
12:05 ZS (Zscaler Inc).
13:40 CRWD (CrowdStrike Holdings INC).
14:40 OKTA (OKTA INC).
15:38 TENB (Tenable Holdings INC).
16:55 VRNS (Varonis Systems INC).
18:08 CALX (CALIX INC).
18:59 ALRM (Alarm.com) — cup and handle pattern.
19:44 SAIL (SailPoint Technologies Holdings INC).
20:30 RPD (RAPID7 INC).
21:28 FEYE (FireEye INC).
22:18 PANW (Palo Alto Networks INC).

Author

Ming Jong Tey

Independent Analyst

Ming Jong Tey has been trading since 2008. He started his learning journey from technical analysis (indicators, Fibonacci, etc...) to value investing. Throughout his journey, he develops an interest in price action with chart pattern trading.

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