An Interesting Character Arc

In the arts, a "character arc" is a metamorphosis or inner journey of a character over the course of a story. And when we think of a given sector in the stock market which may currently be undergoing a major change, the cybersecurity basket of stocks comes to mind. 

After years of disappointing tech savvy investors who expected HACK (sector ETF) plays to thrive in a world where major cybersecurity breaches became fairly common, some plays like FTNT QLYS RDWR have been notably strong in recent months, offsetting the weak action in the likes of CHKP FEYE. 

And just this morning, Barracuda Networks, Inc. (CUDA) received an all-cash private equity buyout offer for $1.6 billion. 

Thus, with M&A picking up now a distinct possibility for HACK-related plays, it is worth noting that CyberArk now has roughly the same market cap as the newly-acquired CUDA. 

On the CYBR daily chart, below, the recent bounce up to the 200-day moving average (yellow line) presents a fairly straightforward test for us to observe going forward. If CYBR can now reclaim its 200-day and base out a few days, I would be inclined to look here for the HACK sector rally to gather steam as we wind down 2017. 

Seemingly no-brainer theses, just as the bull case for HACK plays, can often take a while to play out as the market works through the sector kinks and frustrates bulls expecting an immediate payoff. 

But with an appetite for M&A and the sector winners distinguishing themselves of late, we have our eyes on the likes of CYBR.