Now that Cyberarc (CYBR) is at a new high…here’s the plan. (November 13, 2014)
I want to take one more look at CyberArk ( NASDAQ:CYBR ). I’ve been covering this stock for a while, I think pretty much ever since this breakout here, it might have been a little bit later than that but it doesn’t really matter, does it? The stock was moving up, recent IPO. This was the initial, what I call the “enthusiasm high,” the stock had pushed above there and then started pulling back. I started getting a lot of emails from people on our free email list asking me to be accountable for this. Well, I don’t trade enough stock to be accountable, this moved on it’s own weight.
They announced earnings yesterday and you can see what happened, the stock actually gapped up to a new high, so the opening print here was the highest it’s ever been. Now, this is why this is important, “Oh, you’ve got to sell that, it gapped up that high. My gosh, look at the gap, like 14 percent, you’ve got to sell in to that.” Well not really, because first of all the stock gave us no indication at the open, that it was going to pull back much; it literally never came even close to testing this opening print.
So you always wanted to look at this, since it didn’t crap right away, which is the second part of a gap and crap pattern; since it didn’t crap right away now you’ve got to look at it and say, “Well what’s it going to do? Do I want to be long this stock?” Earnings were pretty good, stocks been in consolidation.
Now this is just a classic IPO pattern that I talk about where once the stock breaks out after a period of consolidation. After it breaks out above it’s initial high here, the stock is just free to move higher, because every day that the stock advances one penny it’s a new all-time high. The thing about stocks that make all-time highs is they kind of tend to keep doing it; it’s generally not like a “one trick pony”. So I would stay long this stock, you can keep a protective stop a little bit below 38.00 or so. If you were trading along with my analysis then you absolutely bought it lower.
The reason I’m mentioning that is this, you can put a stop down here and you’re locking in a profit, that’s my point. If you’re buying a stock lower, the idea is for you to manage you’re risk is at the earliest possible time technically; you could do it another second if you’re looking at your watch, at the earliest possible time, after the stock starts moving, what you want to do is redefine your worst case scenario to break even. Because if it’s break even then the worst your going to do is give back all of your profit and break-even; and then you’ve got your money to go make another trade.
Hopefully this is not going to pull back, you’re not going to break-even, set it a little bit higher than you bought it, you’ve already locked in a profit, but I think you’ve got to now zoom out. This has been trading for such a short period of time this actually is the zoom out. What I would suggest doing is just letting this stock work, almost 10 million shares traded today, this is a stock that’s going to keep moving up because this is institutional buying, this isn’t Jake and Bill’s Hardware Store and Stock Buying Club, this is real buying here so you want to be a part of this.
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