Cyber security: 2015's "buy-and-forget" stocks
"Nothing is more difficult than holding on to your stocks in a bull market"
--Jim Dines
It's official: cyber security stocks are this year's "buy-and-forget" trades.
CyberArk Software (NASDAQ:CYBR) absolutely dismantled earnings expectations and the stock is up 17% today. It broke out earlier this week along with FireEye (NASDAQ:FEYE). Both of these relatively new stocks had been laggards in the industry. Until now.
Now, I know what you're thinking: Great-- I'll buy these stocks when they cool off a bit...
Sorry. That's not going to work. While we could see volatile action from these names over the next few months, they're not going to roll over and give you that perfect buyable dip you're looking for. That's just too easy. The brick is on the gas pedal now that we have some big gaps in play. Not to mention the fact that we're bound to see the next high-profile corporate hack sooner rather than later. Cyber security is media rocket fuel. Splashy headlines are going to continue to drive retail investors to these stocks in droves.
So the way I see it, you have two options:
1. Put these stocks on watch. They continue ripping higher-- and you cry yourself to sleep every night...
2. Buy small positions in a long-term account and do your best to forget they exist. Check on 'em again when the weather warms up...
Now, I'm not insinuating that the second option is an easy one. In fact, I'm not even sure I could take my own advice in this situation. But honestly, when you have a great, long-term story along with insane technical strength, it's probably the best move, especially if you're extremely disciplined-- or just hopelessly forgetful.
Here are the charts, presented without annotations or comment:
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