10Jul2:30 pmEST

It's Always a Rough Trip to Value Town

As the market is prone to do at times when it corrects, some small cap names seem to inevitably fall through the cracks even after the broad market has recovered. 

Case in point: Secureworks Corp (SCWX), currently sporting a $1 billion market cap in the cybersecurity space, enjoyed a glorious late-January/early-February rally only to give it all back and then some as spring and early-summer rolled around. Despite many cybersecurity plays in the HACK ETF sharply rallying back, SCWX was essentially shunned and cast aside, perhaps largely just ignored and overlooked, again, as the market does from time to time. 

On the SCWX daily chart, below, we can see the stock sliding endlessly and perhaps trying to stabilize around the $13 level forming a falling wedge. If there truly is value down here, we can expect a rocky road as the sloppy chart must prove itself. But a stop around $12 gives a defined risk for traders still seeking to extract value from the May correction. 

Another positive for SCWX is that the volume pattern (bottom pane of chart) has decidedly improved since the beginning of June with value players potentially building positions slowly and steadily. 

If nothing else, SCWX offers a different type of setup than the chic names we mostly know and love by now in software. 

Extending the Ride If They Go Down, They're Tak...


This website is intended for educational purposes only. | © 2019 MarketChess.com | All Rights Reserved | Website design by Saco Design | Superpowered by Site Avenger

mobile site | full site