As the dependence on digital tools and communication methods continues to grow, many traders are looking for niche segments of the market worthy of investment. A segment that is difficult to ignore, it is cybersecurity. In this article, we will examine several of the tables used to track the sector and try to determine how the operators are seeking to position themselves in the weeks and months to come.
iShares Cyber security and Technology ETF (IHAK)
Traders who are looking to gain exposure to a segment of a niche, such as cyber security often turn to exchange-traded funds like the iShares Cyber security and Technology ETF (IHAK). As you can see on the chart below, the bounce off the March lows has been strong enough to send the price of the ETF above the resistance of its 200-day moving average. The thrust of the dynamic, which has also triggered a bullish crossover between the 50-day and 200-day moving averages, which is a common long-term techniques buy the sign is used to mark the beginning of a major upward trend. From a risk management perspective, active traders will be more likely to place their stop loss orders below $26.97, or with the aid of the dotted trend line and the 50-day moving average near $29.52, according to the outlook and risk tolerance.
Octa, Inc. (OCTA)
One of the main titles of the IHAK ETF, which could capture the attention of active traders in the course of the coming weeks is Octa, Inc. (OCTA). As you can see on the chart below, the bulls have been in control of the dynamics in spite of March’s sudden decline. The recent retracement to the 50-day moving average and subsequent bounce higher will probably be used by traders as a sign that the bulls are in control of the amount of motion, and the upward trend is likely to continue until leading indicators begin to show signs of a trend reversal.
Akamai Technologies, Inc. (AKAM)
Another top holding of the IHAK ETF that can capture the attention of active traders is Akamai Technologies, Inc. (AKAM). As you can see on the chart below, a symmetrical triangle pattern that has been formed over the course of the last few months. The recent break above the upper trend line, combined with the upward trend in the moving average convergence divergence (MACD) crossover could be used by bulls as a sign that the price is headed higher from here. Stop-loss will probably be placed below the lower trendline near $98 or even the 200-day moving average, as a function of the investment horizon.
The Bottom Line
Cyber security is powered up on the macro trends that dominate the world today. Based on the maps discussed above, clear buy signals combined with near-support in the process of setting the risk/reward in favour of the bulls.
At the time of writing, Casey Murphy did not own a position in any of the assets mentioned.