CyberArk Software (CYBR) - Get Report was downgraded today by TheStreet's quantitative service. In my book, a signal on one investment approach deserves recognition and cross-checking on the charts and indicators. We haven't been fond of CYBR in the past, but in our last review we saw prices, "stuck in a sideways trading range" on CYBR. Shortly after our last review, CYBR gapped to the downside (see the first chart below).
Let's drill down and see what the charts are saying in light of this quantitative downgrade.
In this updated daily bar chart of CYBR, above, we can see both the sideways trading range we discussed last month as well as a big downside gap. Prices made a minor bounce in the days following the gap and subsequently made new lows for the move down. Prices are below the declining 50-day and 200-day moving average lines.
The movement lower of the On-Balance-Volume (OBV) line tells us that sellers of CYBR have been more aggressive than the buyers. The Moving Average Convergence Divergence (MACD) oscillator is well below the zero line, but the two averages that make up this indicator are close to a cover-shorts buy signal, depending on the price action ahead.
In this weekly bar chart of CYBR, above, we can see prices are below support at $45 and below the declining 40-week moving average line. The next possible area of support for CYBR is around $35 and it might not be that important because it dates back to early 2016. The weekly OBV line has been weak for the past three months and suggests we should be bearish on the shares. The weekly MACD oscillator is below the zero line (bearish) but not anywhere near a cover-shorts signal.
Bottom line: Bearish charts and a quantitative downgrade are not a good combination. CYBR could trade lower to the mid-$30s over the next couple of months.
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(This column originally appeared at 1:47 p.m. ET today on Real Money, our premium site for active traders. Click here to get great columns like this from Bruce Kamich, Jim Cramer and other writers even earlier in the trading day.)
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