Palo Alto Leads 3 Cybersecurity Stocks In Buy Range

A fresh breakout for top growth name and IBD 50 member Palo Alto Networks (PANW) leads key moves by top cybersecurity stocks that are either in buy range or building bases. Palo Alto group peers Zscaler (ZS), Okta (OKTA) and Qualys (QLYS) are showing compelling action, while computer networking giant Cisco Systems (CSCO) stock remains in buy range after a post-earnings breakout.

Top Cybersecurity Stocks

Palo Alto Networks stock leads this group of top cybersecurity stocks with a highest possible IBD Composite Rating of 99. Qualys stock is right behind with a 98, while Okta and Zscaler each have a 73. The Computer Software-Security industry group has been strong in 2018, as has been the software sector as a whole.

Dow Jones stock Cisco Systems is not a pure play among top cybersecurity stocks, but artificial intelligence and cybersecurity are big contributors to Cisco’s turnaround. Cisco, in the related Computer-Networking industry group, earns a 77 as fundamentals have just begun to improve in recent quarters.

The Composite Rating measures stocks on key fundamental and technical metrics like earnings growth, return on equity and price performance.

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Palo Alto Networks Stock

Palo Alto stock gapped up 4% Friday, breaking out of a flat base with a 219.48 buy point. Even with the big share price gain, the relative strength line is not quite at new high ground. Since the RS line measures price performance vs. the S&P 500, seeing the line at a new high on a breakout is a bullish indicator.

But volume, another key indicator, is well above average. That indicates support from institutional investors.

Zscaler Stock

Meanwhile, March 2018 IPO Zscaler has an RS line hitting a new high amid a breakout over a 44.08 buy point Friday. Zscaler is not yet profitable, but has seen strong sales growth. Revenue grew 49% in Zscaler’s first quarterly report as a public company, issued in early June. The Zscaler IPO priced at 16.

Cisco Systems Stock

Cisco stock is trading in buy range from a double-bottom base with a 44.91 buy point. Earnings in mid-August fueled a gap up for Cisco stock, pushing it past the entry in heavy volume. The Dow Jones stock is now trading 3.5% above the buy point, meaning it’s still in buy range.

Okta Stock

Okta, which went public in April 2017, is closing in on a consolidation buy point after an 8.55% gain this past week. Shares are now 2% below a 61.10 buy point. But Okta stock has already been on a big run, meaning this is a later-stage base. Later-stage bases are more risky as they have a higher chance of failing.

Like Zscaler, Okta is not yet profitable either.

Qualys Stock

Qualys stock appears to be forming a base, but needs another week of trade to meet the minimum length required for a proper base to form. Shares reclaimed their 50-day moving average on Friday. The potential entry point for now would be 98.40, if the base is complete.

Qualys has been on a massive run too, but its last base reset the base count by undercutting the base pattern that came before.

Cybersecurity Earnings

Okta and Palo Alto Networks earnings reports are due Sept. 6. Earnings spark some of the biggest stock moves throughout the year, so the reports could be the next catalyst for these top cybersecurity firms. But owning a stock heading into earnings carries added risk.


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The post Palo Alto Leads 3 Cybersecurity Stocks In Buy Range appeared first on Investor's Business Daily.

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