A Potential Broadening Pattern on Cyber-Ark Has Risks and Rewards

Cyber-Ark Software Ltd. (CYBR) was featured on Jim Cramer's Mad Money show last night. In his second "Executive Decision" segment of the evening, Jim had a conversation with Udi Mokady, chairman and CEO of CyberArk Software that reported on Tuesday a 12-cents-a-share earnings beat that included a 56% increase in deferred revenue. Those are the numbers. In addition, theStreet.com's quantitative service upgraded CYBR to a buy today. Hey what about the charts and indicators? Let's check.

In this daily bar chart of CYBR, below, we can see a sideways consolidation pattern from September to early February. Starting in late February CYBR starts an impressive rally with only sideways or shallow corrections. In late July and early August the pattern changes. CYBR declined sharply and broke its June low. Prices managed to bounce to the underside of the 50-day moving average line but then gapped above it and made new highs. The higher highs and lower lows since June could be a broadening pattern. This pattern can be a bullish continuation pattern or a top reversal. CYBR is back above the rising 50-day line again and perhaps too far above the bullish 200-day moving average line. The daily On-Balance-Volume (OBV) line shows a bullish trend from early January and recently made a new high for the move up to confirm the advance. The price action and the volume data are bullish but the 12-day price momentum study shows equal highs in momentum in June and July and a lower high recently in August. When compared to the higher price highs this is a bearish divergence and suggests that the rally is slowing....152 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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