From Mimecast Limited to Forescout Technologies, Inc., the selloff in cybersecurity stocks has been brutal in recent weeks. But a key technical indicator suggests the group may have hit a bottom, according to All Start Charts.
“Within that same theme we’re looking at the Cybersecurity subsector finding support at its all-time low relative to the overall Technology sector,” All Start Charts wrote in a note to clients. “While all-time lows are not something we find in uptrends, when prices quickly reverse from a support level as momentum diverges, it provides an opportunity for some counter-trend mean reversion to occur. That’s exactly what we’re looking for here as long as the price of this ratio stays above its recent low. This setup is very similar in nature to the Social Media/Technology ratio we outlined in a previous issue of our Top 10 Charts Report and is now stabilizing and attempting to work its way higher.”