Is cyber security going to become a commodity some day? After all, with one bad click you can pretty much give the bad guys a lot of financial information that can come back to bite you in the rear.

Giving someone access to a bank account through by accident or through their fraudulent means can ruin you. Protecting your assets and learning methods to do it are vital to a secure online presence.

Even with a little old website like mine, it is amazing the number and types of attacks that it sees on a daily basis. So far, I am liking the set-up with the new webhost provider and their security. I also know after 4 years which security plug-ins that work better than others. It sure feels nice to be able to focus on articles rather than member’s access and website downtime issues.

Cybersecurity is bound to become a larger part of our lives, especially as the “internet of things” expands over the next several years. Protecting that infrastructure will become vital to everyone as everyone’s information becomes more and more digital.

Cybersecurity is one thing, and the cybersecurity stock sector is another. While there have been some bright spots here and there, it has been a very poorly performing stock sector when compared to the S&P 500 or other indicies.

This article is going to look at and focus on the chart activity for the cream of the crop in the cybersecurity field. The top 2 cybersecurity firms in the business today from a profit and growth standpoint – CyberArk & Palo Alto Networks (CYBR & PANW respectively). PANW has been covered by Trendy Stock Charts previously while CYBR is a new stock I am analyzing in the sector to try to get a better feel for the sector rather than just a single stock within it.

Palo Alto Networks – PANW

CyberArk & Palo Alto Networks are the top cybersecurity firms that are also publicly traded companies. I am going to look at a long-term chart for each and then also a shorter-term chart to look for trading opportunities based on the longer-term trend identified.

This is a 5 year monthly candlestick chart for PANW. I’ve placed 2 different Fibonacci Extension Tools on the chart to analyze their price projections and look for confluence areas or price targets of specific concern. Notice the black 161.8% Target Line and the blue 100% Target Line – both these Target Lines bring PANW’s share price back up for a re-test of its prior highs.

Analyzing Support Areas for Palo Alto Network’s Share Price

The strong buying volume suggest a move upwards towards the 100% Target Line from the blue Fibonacci Extension Tool and the 161.8% (or the Golden Ratio) from the black Fibonacci Extension Tool. he confluence area of these 2 Target Lines is a great location to trim some shares and look to repurchase those shares at lower levels.

PANW – Overhead Resistance

If PANW continues to rally into year-end like most stocks as I am anticipating, PANW is going to have a test early. It has some pretty stiff resistance around the $175 area from a Falling Window candlestick pattern that developed in January 2016. The first re-test of an overhead resistance area is usually a time to sell some shares and fade the trade. Any sold shares would be repurchased at the current level of $160 or below.

Palo Alto Networks (PANW) Overhead Resistance Area at $175

The $175 area could be the short-term lid on the price. If there is a break above towards the $200 area as the 5 year monthly chart suggests is possible (the very first chart above), then the move would probably be pretty quick in nature. When I say pretty quick, I am talking a matter of days.

With earnings tomorrow after the market closes, I would wait to see if a drop to the $145 area presents itself before making my first purchase of shares. If you are long shares already, wait for a possible gap-up right back above the overhead resistance area from the Falling Window candlestick pattern. If that doesn’t play out, then start fading the trade on the first re-test of the $175 resistance area.

Whichever initial move plays out, it will happen too quickly to probably take advantage of unless you already happen to be in the “right” position based on the post-earnings activity.

CyberArk – CYBR

CyberArk’s software is used in critical industries around the world. Industries such as the financial sector and the medical sector. Follow this link to CyberArk’s website to learn more about the industries they serve.

CyberArk & Palo Alto Networks have another thing in common other than the obvious cybersecurity link. Both firms have less than 5 years of charting history since they are relatively new public companies.

Analyzing Upside Target Areas and Resistance Areas for CyberArk’s Share Price During This Attempted Rally

CyberArk has already reported earnings, so the “earnings risk” is taken out of the stock. It beat on earnings when it reported back on November 3, 2016. I’m not sure what the guidance was. The share price seems to be reacting favorably though, and that is all we care about.

Any drop to the $35 – $40 area is a great buying opportunity. I expect that CYBR is going to reach for the 100% Target Line from the blue Fibonacci Extension Tool, giving CYBR a target price of $70.

CYBR – Support & Resistance Analysis

Looking shorter-term at CyberArk, this is a 1 year daily candlestick chart. There are a couple of different things that I want to point out on this chart. The first one item is that this is another example that confirms to buy the first gap-up in a new uptrend. After completing a 50% Retracement of its previous uptrend, CyberArk attempted a new uptrend and had an early gap-up.

As I have pointed out on several different charts now, early gap-ups lead to profits. If an early gap-up pulls back to the gap-up area, reload. This early gap-up has pushed CYBR’s share price right back into a sell zone though.

Analyzing Overhead Resistance Areas for CyberArk’s Share Price in the Near-Term

After developing that first gap-up and racing upwards, CYBR’s share price now finds itself back at a resistance area. Statistically, it is always best to sell during the first re-test of a resistance area as the re-test usually fails.

If the pullback that then follows develops on light selling volume, look to repurchase those shares. Based on the blue Fibonacci Retracement Tool I placed on the short-term uptrend, CYBR’s share price should find support around the $$48 – $50 area before then making another attempt at breaking through the overhead resistance.

A re-test of the 1st gap-up area is the best and most ideal opportunity to go long again or to repurchase shares. Some sort of good news or catalyst will be needed to spur buying volume and get through the resistance area from the 3 Black Crows candlestick pattern though.

 CyberArk & Palo Alto Networks – Summary

The cream of the crop in the cybersecurity industry may have a little more upside ahead, but waiting for the right pullback is ideal to try to maximize returns on the share prices of these 2 companies.

If you are day trading, enjoy and trade the uptrend for CyberArk after it completes a 10% pullback to the $45 area. Jump on the trend in that area if buying support is found and wait for the next re-test to break through the overhead resistance. The 3rd time just might be the charm.

For Palo Alto Networks, wait until Tuesday and see what the trend is going to be for its share price since it reports earnings on Monday after the market closes. There is no need to purchase shares before-hand and try to game this earnings report. Instead, let the dust settle and see if you can pick up shares in the $145 area.