Emerging Trends in Technology

Despite some hiccups along the way, it is tough to imagine a future without the need for cybersecurity firms capable of scaling large economies. While discerning which firms will be the tried and true leaders of the HACK ETF for the cybersecurity-related stocks, we know that the survivors of the recent period since 2015 where plenty of HACK plays badly lagged behind the market are now threatening to sustain fresh uptrends.

A name like FireEye (FEYE) garners plenty of interest from momentum traders due to the feast-or-famine nature of the charts in recent years. But with the Palo Alto Networks (PANW) earnings gap up this morning we want to take a step back and assess this laggard's next potential move.

Back in 2015, long-time readers will recall we were rather cautious on this name due to the very steep uptrend which would likely prove to be unsustainably steep. That need not mean an outright crash or anything close to it--But simply that the risk/reward ratio for new longs was diminishing. 

Since mid-2015, PANW has been correcting and alternately grinding longs lower. This is quite a tedious process to be riding down a former winner like this for quarters on end. Last winter's earnings gap down only added insult to injury. And while this morning's gap up is a good start, we of course will need to see better action to confirm a new uptrend. 

However, when you compare the newly two-year consolidation (light blue lines on weekly chart, below) to the prior multi-year advance, a bullish interpretation here is that PANW now has a massive coiled spring set to unload higher for a new bull cybersecurity run. With this in mind, we have a few other cyber plays on watch for Members which should also thrive and are in fact better off technically than PANW at the moment.