The broader market is fairly mixed with one clear leader: technology. I am also seeing mixed performance within the technology sector and within specific groups. Semiconductors are strong overall, but groups like cybersecurity are more mixed. This makes it a stock pickers market. In such conditions, I am looking for individual stocks that are emerging as leaders. Today’s article will focus on CyberArk Software (CYBR), which was featured in ChartTrader on June 11th. [1]
The chart below shows CYBR breaking out of a falling wedge with a strong advance over the last two weeks. It is an emerging leader because it recently broke the 50-day SMA and exceeded its mid May high (breakout). In addition, the overall pattern and retracement look like a correction within a long-term uptrend. CYBR is well above the 200-day SMA and the decline back to 225 retraced around half of the prior advance, which was a whopping 80%. Thus, we have a two steps forward and one step backward sequence for the long-term uptrend.
The indicator window shows the price-relative (CYBR/RSP ratio) turning up in June and breaking its mid May high. This means CYBR is starting to outperform the broader market again (relative strength). Thus, we have a long-term uptrend and break above the May high on the price chart. We also have a price-relative breakout to signal relative strength. This is a bullish combination. A strong breakout should hold so I would set a re-evaluation level on a close below 235 (green line).
Looking for more emerging leaders? This past week we covered two more cybersecurity stocks, a semiconductor name with a classic correction and a few healthcare stocks. ChartTrader reports and videos also cover broad market trends with a focus on SPY, QQQ and MAGS. Click here to learn more and gain immediate access. [2]