The Best Cybersecurity Stocks Showing Profitable Investment Opportunities
Cybersecurity companies occupy a unique space. It can never end or stand still. It can only escalate and transform. And given the increase in spyware attacks,…
Cybersecurity companies occupy a unique space. It can never end or stand still. It can only escalate and transform. And given the increase in spyware attacks, the necessity for cybersecurity will increase.
So, if you're wondering whether there's "growth" in the cybersecurity industry, well, yes. Let's look at the industry using the First Trust NASDAQ Cybersecurity ETF (CIBR) as a proxy.
CHART 1: YTD COMPARISON BETWEEN CIBR ADN S&P 500 INDEX. More recently, cybersecurity stocks have outperformed the S&P 500.Chart source: StockCharts.com. For educational purposes.
Looking back year-to-date, CIBR and the S&P 500 index's performance have always intertwined. But in the last two months leading to the Q3 earnings season, cybersecurity stocks are leading the S&P 500 index ($SPX) by a much wider margin. Let's take a closer look at CIBR.
CIBR: Bullish Bounce Amid Stalling Momentum
CHART 2: DAILY CHART OF CIBR ETF. Look for CIBR to break out above the $47.50 level.Chart source: StockCharts.com. For educational purposes.
As noted in the article Which Cyber Security ETF is the Strongest?, you can see the signs of strength in CIBR. The most recent swing low is above its August low and 200-day simple moving average (SMA). But there isn't much of an uptrend thesis until CIBR breaks above resistance at the two equal highs at $47.50. And if you look at price in relation to the kumo (Ichimoku cloud), it's trading right into it, signaling a period of market indecision. You can also see a significant drop in buying pressure, as shown by the Chaikin Money Flow.
So, cybersecurity stocks may have been outperforming the S&P 500 over the last few months, but their collective momentum has largely stalled. Other factors are weighing into this stall, a big one being the surge in 10-year US Treasury yields ($TNX). But we're also approaching Q3 earnings season. And for the biggest of these cybersecurity companies, it may be a make-or-break moment. Let's dive into four of the biggest cybersecurity companies (by market cap).
Palo Alto Networks (PANW): Trending but Troubled?
Palo Alto Networks is the largest cybersecurity stock by market cap (over $79 billion), yet the stock's trading volume of just under 4 million on average is far below most popularly traded stocks. You can grab this information on StockCharts' Symbol Summary, a useful tool for at-a-glance fundamentals and technicals. With a SCTR score of 94.9, it demands a look at PANW's current momentum and trajectory.
CHART 3: DAILY CHART OF PANW. Palo Alto Network's stock price is testing its highs. Will it break above this resistance level?Chart source: StockCharts.com. For educational purposes.
Like CIBR, PANW bounced well above its August lows and 200-day SMA. It found support at the kumo, which also shifted from bearish to bullish, projecting further bullish support 26 periods ahead. While PANW tests its three-month highs for the fourth time, divergence and negativity in the CMF suggest that buying pressure has dwindled, and momentum is waning. Of course, this can all change when PANW reports earnings on November 16. And it's important to note that PANW has always delivered a positive earnings surprise since 2015.
The second-largest cybersecurity stock, with even greater average trading volume, is Fortinet (FTNT). While FTNT has similarly delivered strong earnings surprises since 2016, its technical scenario differs from PANW.
Fortinet (FTNT): Legit Plunge or Guidance Fakeout?
CHART 4: DAILY CHART OF FORTINET STOCK. The stock chart of FTNT shows weakness, but this could change when the company reports earnings in November.Chart source: StockCharts.com. For educational purposes.
On August 4, FTNT had its biggest one-day drop on record, falling 26%, after issuing a negative earnings forecast. This took its prices below the 200-day SMA, and its low above $56.00 has been tested four times, proving to serve as resilient support. Still, it has yet to break above the 200-day SMA support-turned-resistance, and the bearish kumo thickens. And its SCTR score of 25 adds further gloom to the technical picture. The CMF, however, shows a higher low against FTNT's parallel lows (bullish divergence?). In short, FTNT's November 2 earnings report is critical, and if it outperforms its issued guidance, then FTNT could surge.
Crowdstrike (CRWD): A Steady Uptrend
CHART 5: DAILY CHART OF CROWDSTRIKE STOCK. The stock price is an an uptrend. Keep an eye on near-term resistance levels.Chart source: StockCharts.com. For educational purposes.
The third-largest cybersecurity stock by market cap is Crowdstrike (CRWD). In contrast to the previous two stocks, CRWD has been on a steady uptrend since the beginning of the year. Breaking above its September high, it exemplifies an "uptrend" in its most standard definition: a series of higher highs and higher lows. Its SCTR score of 97 places it well above PANW. CRWD is slated to report on November 28, and like its industry competitors, CRWD has a history of positive earnings surprises.
Last on this list is the fourth biggest cybersecurity stock by market cap: Zscaler (ZS)
ZScaler (ZS): A Highwire Outperformance?
CHART 6: DAILY CHART OF ZSCALER. The stock has broken above a broadening top formation. Does this mean the stock will pull back or continue to move higher?Chart source: StockCharts.com. For educational purposes.
ZS saw a dramatic jump on May 6 due to a Barclays analyst upgrade. From June up until a few days ago, ZS has been forming a long Broadening Top before breaking out to the upside. To splash a little sobriety on its bullish surge, broadening tops have a 67% rate of pulling back. But there's also a rising and thickening bullish kumo, which suggests a range of potential support. With a 98.4 SCTR score, ZS leads all four stocks on positive technical ranking. And like the other four stocks discussed, ZS, too, has a history of outperforming on the earnings front. The company is slated to report on December 7.
The Bottom Line
The cybersecurity world isn't just about dodging digital bullets; it's about innovation and market performance. While CIBR gives a glimpse of the industry's potential, big players like PANW, FTNT, CRWD, and ZS show an interplay of technicals and fundamentals behind the proverbial firewall of valuations. As the necessity of cybersecurity grows, so do the stocks. And if you're not watching this space, it's time you did.
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Credit: Impact Journals
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Impact Journals will be participating as an exhibitor at the American Association for Cancer Research (AACR) Annual Meeting 2024 from April 5-10 at the San Diego Convention Center in San Diego, California. This year, the AACR meeting theme is “Inspiring Science • Fueling Progress • Revolutionizing Care.”
Visit booth #4159 at the AACR Annual Meeting 2024 to connect with members of the Agingteam.
About Aging-US:
Agingpublishes research papers in all fields of aging research including but not limited, aging from yeast to mammals, cellular senescence, age-related diseases such as cancer and Alzheimer’s diseases and their prevention and treatment, anti-aging strategies and drug development and especially the role of signal transduction pathways such as mTOR in aging and potential approaches to modulate these signaling pathways to extend lifespan. The journal aims to promote treatment of age-related diseases by slowing down aging, validation of anti-aging drugs by treating age-related diseases, prevention of cancer by inhibiting aging. Cancer and COVID-19 are age-related diseases.
Agingis indexed and archived byPubMed/Medline (abbreviated as “Aging (Albany NY)”), PubMed Central, Web of Science: Science Citation Index Expanded (abbreviated as “Aging‐US” and listed in the Cell Biology and Geriatrics & Gerontology categories), Scopus (abbreviated as “Aging” and listed in the Cell Biology and Aging categories), Biological Abstracts, BIOSIS Previews, EMBASE, META (Chan Zuckerberg Initiative) (2018-2022), and Dimensions (Digital Science).
Please visit our website at www.Aging-US.com and connect with us:
NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism
One month after the inflation outlook tracked by the NY Fed Consumer Survey extended their late 2023 slide, with 3Y inflation expectations in January sliding to a record low 2.4% (from 2.6% in December), even as 1 and 5Y inflation forecasts remained flat, moments ago the NY Fed reported that in February there was a sharp rebound in longer-term inflation expectations, rising to 2.7% from 2.4% at the three-year ahead horizon, and jumping to 2.9% from 2.5% at the five-year ahead horizon, while the 1Y inflation outlook was flat for the 3rd month in a row, stuck at 3.0%.
The increases in both the three-year ahead and five-year ahead measures were most pronounced for respondents with at most high school degrees (in other words, the "really smart folks" are expecting deflation soon). The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at all horizons, while the median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.
Going down the survey, we find that the median year-ahead expected price changes increased by 0.1 percentage point to 4.3% for gas; decreased by 1.8 percentage points to 6.8% for the cost of medical care (its lowest reading since September 2020); decreased by 0.1 percentage point to 5.8% for the cost of a college education; and surprisingly decreased by 0.3 percentage point for rent to 6.1% (its lowest reading since December 2020), and remained flat for food at 4.9%.
We find the rent expectations surprising because it is happening just asking rents are rising across the country.
At the same time as consumers erroneously saw sharply lower rents, median home price growth expectations remained unchanged for the fifth consecutive month at 3.0%.
Turning to the labor market, the survey found that the average perceived likelihood of voluntary and involuntary job separations increased, while the perceived likelihood of finding a job (in the event of a job loss) declined. "The mean probability of leaving one’s job voluntarily in the next 12 months also increased, by 1.8 percentage points to 19.5%."
Mean unemployment expectations - or the mean probability that the U.S. unemployment rate will be higher one year from now - decreased by 1.1 percentage points to 36.1%, the lowest reading since February 2022. Additionally, the median one-year-ahead expected earnings growth was unchanged at 2.8%, remaining slightly below its 12-month trailing average of 2.9%.
Turning to household finance, we find the following:
The median expected growth in household income remained unchanged at 3.1%. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023, and remains above the February 2020 pre-pandemic level of 2.7%.
Median household spending growth expectations increased by 0.2 percentage point to 5.2%. The increase was driven by respondents with a high school degree or less.
Median year-ahead expected growth in government debt increased to 9.3% from 8.9%.
The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 0.6 percentage point to 26.1%, remaining below its 12-month trailing average of 30%.
Perceptions about households’ current financial situations deteriorated somewhat with fewer respondents reporting being better off than a year ago. Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off and a slightly larger share of respondents expecting to be worse off a year from now.
The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.4 percentage point to 38.9%.
At the same time, perceptions and expectations about credit access turned less optimistic: "Perceptions of credit access compared to a year ago deteriorated with a larger share of respondents reporting tighter conditions and a smaller share reporting looser conditions compared to a year ago."
Also, a smaller percentage of consumers, 11.45% vs 12.14% in prior month, expect to not be able to make minimum debt payment over the next three months
Last, and perhaps most humorous, is the now traditional cognitive dissonance one observes with these polls, because at a time when long-term inflation expectations jumped, which clearly suggests that financial conditions will need to be tightened, the number of respondents expecting higher stock prices one year from today jumped to the highest since November 2021... which incidentally is just when the market topped out during the last cycle before suffering a painful bear market.
Homes listed for sale in early June sell for $7,700 more
New Zillow research suggests the spring home shopping season may see a second wave this summer if mortgage rates fall
The post Homes listed for sale in…
A Zillow analysis of 2023 home sales finds homes listed in the first two weeks of June sold for 2.3% more.
The best time to list a home for sale is a month later than it was in 2019, likely driven by mortgage rates.
The best time to list can be as early as the second half of February in San Francisco, and as late as the first half of July in New York and Philadelphia.
Spring home sellers looking to maximize their sale price may want to wait it out and list their home for sale in the first half of June. A new Zillow® analysis of 2023 sales found that homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home.
The best time to list consistently had been early May in the years leading up to the pandemic. The shift to June suggests mortgage rates are strongly influencing demand on top of the usual seasonality that brings buyers to the market in the spring. This home-shopping season is poised to follow a similar pattern as that in 2023, with the potential for a second wave if the Federal Reserve lowers interest rates midyear or later.
The 2.3% sale price premium registered last June followed the first spring in more than 15 years with mortgage rates over 6% on a 30-year fixed-rate loan. The high rates put home buyers on the back foot, and as rates continued upward through May, they were still reassessing and less likely to bid boldly. In June, however, rates pulled back a little from 6.79% to 6.67%, which likely presented an opportunity for determined buyers heading into summer. More buyers understood their market position and could afford to transact, boosting competition and sale prices.
The old logic was that sellers could earn a premium by listing in late spring, when search activity hit its peak. Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.
Mortgage rates have been impacting affordability and sale prices since they began rising rapidly two years ago. In 2022, sellers nationwide saw the highest sale premium when they listed their home in late March, right before rates barreled past 5% and continued climbing.
Zillow’s research finds the best time to list can vary widely by metropolitan area. In 2023, it was as early as the second half of February in San Francisco, and as late as the first half of July in New York. Thirty of the top 35 largest metro areas saw for-sale listings command the highest sale prices between May and early July last year.
Zillow also found a wide range in the sale price premiums associated with homes listed during those peak periods. At the hottest time of the year in San Jose, homes sold for 5.5% more, a $88,000 boost on a typical home. Meanwhile, homes in San Antonio sold for 1.9% more during that same time period.
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