For his first Executive Decision segment of "Mad Money" Monday, Jim Cramer spoke with Udi Mokady, co founder, chairman and CEO of CyberArk Software Ltd. (CYBR) , the cybersecurity firm with shares up 62% for the year.
Mokady said as more companies embrace the digital transformation they need to protect themselves from hackers. Those hackers could be disgruntled employees, individuals looking for ransoms, or even organized groups or nation states.
Mokady said CyberArk's customers range from enterprises to government agencies, and certain sectors, such as energy, have a lot of older legacy systems that need to be upgraded and better protected from modern threats.
Let's check out the charts and indicators to see if there are any threats to the rally in CyberArk shares.
In this daily bar chart of CYBR, below, we can see that CYBR made a strong rally from late December 2018 (when the broad market bottomed) to late July when prices corrected to the downside. Prices rebased or bottomed out in September/October and have firmed the past six weeks, climbing above the rising 50-day moving average line and the positively sloped 200-day moving average line.
The daily On-Balance-Volume (OBV) line declined from July into October as prices corrected, but the line has been improving in recent weeks, telling us that buyers have again become more aggressive. The 12-day price momentum study shows a bullish divergence from August to October that signaled the recent rally, but momentum has been slowing from early November. Maybe we will see CYBR trade sideways awhile before renewed gains.
In this weekly bar chart of CYBR, below, we can see how prices came out of a big base in 2017 and rallied into 2019. Prices corrected from July 2019 and spent a couple months below the rising 40-week moving average line. Prices are now back above this long-term indicator of trend. The weekly OBV line has begun improving from early October and helps to confirm the recent price strength. The Moving Average Convergence Divergence (MACD) oscillator recently crossed to the upside for a cover shorts buy signal and an outright go long signal does not look too far away.
In this Point and Figure chart of CYBR, below, we can see a potential upside price target of $137 projected.
Bottom line strategy: CYBR could trade sideways around the $120 level in the next few days or even for a couple weeks, but we should see renewed strength into the end of the year and into 2020. Raise stops on longs to a close below $110. The $135-$140 area is our first upside price objective.