Chart of the Day: Close Look at the Cybersecurity ETF as Big Names Report
We charted the First Trust NASDAQ Cybersecurity ETF ($CIBR) last month on a breakout move —and that has continued to be the case today.
We’ve noted in the past how the best trends are the most difficult to get onboard, as the market just won’t let you in that easily. The chart of the CIBR shows few pullbacks for an entry point, and most investors loathe the decision to buy when a security is at an all-time high. But that is where emotions cross with fundamentals/technicals and common sense.
Earnings have been a big reason for the rising tide of the CIBR. Last month we had names like Cisco ($CSCO) and Fortinet ($FTNT) ripping higher after earnings and they have continued to move.
Tuesday evening’s strong earnings from Palo Alto Networks ($PANW) might spur even more buying, and then today (June 3) we have the two biggest names in the ETF reporting, Broadcom ($AVGO) and CrowdStrike ($CRWD). There is worry these reports might spur a sell-the-news effect, but even so that might finally set up the dip buying opportunity many have been waiting on.
If that does indeed happen, it’s more good news for the bulls as it would bring a likely higher low in the chart. Remember, higher highs and higher lows mean an uptrend is intact.
Money flows have been very strong in this ETF, stochastics (momentum) has been overbought for weeks and relative strength is off the charts. A pullback needed? Sure, but an overbought reading is simply a condition and not a signal.
We like the CIBR in TheStreet Pro Portfolio and rate it a Two, or “stockpile on pullbacks.”
More Pro Portfolio:
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- May Monthly Roundup: Sell in May? No Way!
At the time of publication, TheStreet Pro Portfolio was long CIBR and AVGO.
