CYBR--How to Find Winners in a Correction
When the market is in a correction, it is easy to get a little depressed about the prospects of finding any stocks to invest in. But savy investors know to stay focused and look for stocks that act strong relative to the market.
The 50/50 Methodology provides a simple way to assess stock performance relative to the overall market. During the current correction, the S&P failed to find support at its WEEKLY 50-EMA, and the index fell about 17% below the moving average.
So to find future winners, simply look for stocks that have held ABOVE their weekly 50-EMAs during the correction. These stocks are more likely to bolt higher when the correction ends (that process may be occurring now).
For example, see the weekly chart of Cyberark (CYBR) below:
While the S&P was tanking, CYBR entered a range pattern and remained ABOVE its weekly 50-EMA. This suggests that the smart money is still holding on to their stock shares.
The RSI-20 fell to the 50 level but didn't cross below it. This indicates that price is strong enough to resume the weekly uptrend. A reading above 50 is one of the two key criteria for the 50/50 strategies.
Don't miss the fact that the 50-EMA is still RISING. This is also part of the 50/50 criteria.
Currently, a break above $79.26 would signal potential continuation of the weekly uptrend. However, a lower-priced entry would be possible using the 50/50 LOW RISER Strategy on a daily timeframe.
Keep an eye on CYBR. There isn't a signal to enter just yet, but stocks like CYBR could take off fast when the correction is finally over.