From the desk of Tom Bruni @BruniCharting
For the last few weeks I’ve been writing in our notes to Institutional clients and internally to our team about the slow rotation into Cyber, and last week we saw that trend accelerate to the upside.
The strength in Technology has been no secret, however, until now most of the strength was in the Software and Cloud Computing ETFs IGV and SKYY.
Over the last week or two however, we’ve seen money flowing into the Cybersecurity ETF HACK, leading to a new breakout relative to the S&P 500 that targets its all-time highs (12.50% higher)
Click on chart to enlarge view.
After a strong first half of 2018, this ratio spent the rest of the year consolidating through time and building a nice base near its rising 200-day moving average. With last week’s move, momentum has gotten back into a bullish range and prices are testing their ’18 highs.
Sector rotation continues to provide opportunity on the long side as the major averages grind higher and Cyber looks like the current beneficiary of that. As long as prices are above this downtrend line from their June highs, the out-performance in this space is likely to continue.
We’ve done a deep dive for members into the space to outline the individual stocks with the best reward/risk.
Thanks for reading and let us know if you have any questions!