CIBR: Profit From Digital Defense?

Think about this, how many times have you logged onto your computer or picked up your phone to see a fresh news headline about the latest cyber-attack that has debilitated a major corporation? It feels like almost a weekly occurrence at times. While this is a major problem for corporate America and governments around the world, this creates HUGE opportunity! The opportunity lies in the Cybersecurity industry, those that provide solutions to insulate major companies and governments against constant cyber threats.

When looking at the charts today, I spotted one chart in particular that looks constructive and can also provide exposure to the secular investing theme of Cybersecurity. The chart is for the First Trust Nasdaq Cybersecurity ETF, symbol: (CIBR).

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In the daily chart, you can see CIBR’s MACD is signaling a very clear ‘Buy’ signal as the MACD line is trading above the 18-day EMA. This is a clear confirmation of strong momentum behind the ETF’s current trend and this is exactly the type of equity that I would look to trade in order to gain exposure to the Cybersecurity industry. CIBR is an ETF so it provides investors with access to a wide basket of companies in this space all under one ticker.

Now, there are several ways that I would consider to actually go long this setup. One could certainly purchase the shares or even buy some calls. However, while the ETF has clear momentum, after the recent straight up rally, its likely due for a cooling off period. Because of this, I’d likely look to capitalize on this opportunity using my call option spread strategy. This way I’ll be set to benefit if the stock continues to rise, trades flat or even sells off by a bit. In fact, today there was a setup I spotted where CIBR could even decline by more than 7.5% and the trade would be on pace to still make a nice profit.

Wishing You the Best in Investing Success,