Cybersecurity ETFs Come to Life as New Trend Stage | chart of art

The Cybersecurity ETF (CIBR) continues its lead, hitting record highs last week. It is important to remember that CIBR began its leadership role much earlier, as it hit new highs in late August. Today’s report will analyze recent breakthroughs and suggest some possibilities for the future.

First, note that in October, technology SPDR (XLK) and five technology-related ETFs (Semi, Cybersecurity, Software, Fintech, and Cloud) are leading the pack. They are up over 2% and easily outperform the major index ETFs (SPY, QQQ, IWM). Technology ETFs underperformed in July and August and are now regaining steam.

I introduced CIBR on Art’s Charts on September 14th, showing how to use the percentage above the MA(5, 200) to define trends and reduce whipsaws. In long-term uptrends, stocks and ETFs experience both trending and non-trending periods, with the latter often lasting longer.

The chart below shows the upward trend in CIBR over a period of less than four months from late October 2023 to mid-February 2024. A period of non-trend followed and lasted for more than six months. Most recently, the ETF broke out of this range and entered a new trend period. I expect this trend period to last for several months and push prices higher.

The breakout zone around 59 (red line) turns into the first support zone to watch out for in case a pullback occurs. A pullback occurs when the price falls back into a resistance area after a breakout. Overall, support is seen in the 59-60 area and a pullback to this area would provide a second opportunity to participate in the breakout.

TrendInvestorPro focuses on CIBR, technology-related ETFs, and technology stocks moving from non-trending periods to trending periods. We believe we are looking at a seasonal pattern where the market turns bullish soon after the election. Opportunity awaits! Click here for more information.

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Highlights from recent weekly reports/videos:

October 4th Report: We confirmed strong breakouts in several technology-related ETFs (QQQ, XLK, MAGS). We also recorded continued strong performance in our Software and Cybersecurity (IGV, CIBR) segments. The report also shows a bullish continuation pattern for three major AI stocks and identifies two bullish setups in the healthcare sector.

September 19th report: We started with the breadth model, which has maintained a bullish stance since December 7th. Tightening yield spreads continue to show confidence in credit markets. This report features bullish setups in ETFs related to copper, base metals, copper miners, and palladium (CPER, DBB, COPX, PALL).

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