CYBR is up almost 5% this week, now what?
This is part 2 of this trade. You can see the first post here.
This is the part of trading that often gets ignored, trade management. On Monday morning, I outlined all the fundamental and technical reasons why the stock could go higher. It’s up 5% so far, gaining as much as 7%, before negative market momentum into yesterday’s close. However, with the market down 1% this week, it’s a great start.
Now, your game plan for this trade should dictate how you manage it. Individuals focused on a quick trade or momentum move, likely would have closed the position for a nice gain already or booked at least 50% of their profits. Great job if you are that trader, but I am focused on a larger play, the short-squeeze of CYBR bears.
There are roughly 1.9 million shares short this stock right now, with top 5 holders of CYBR holding over 60% of outstanding shares. The daily volume continues to steadily increase as price increases. CYBR is showing relative strength this week compared to the stock market.
These are all bullish signs and will keep me in CYBR. All I will do now, is raise my position stop price to breakeven. Thus, hopefully eliminating any chance of turning a winning trade into a losing one.
Looking back on the original post, outlining my short-squeeze thesis, has anything changed fundamentally? The answer is ‘No’. My hope is that nothing changes until earnings on May 14. http://www.nasdaq.com/earnings/report/cybr
Why? Both, the technical and fundamental momentum are positive, another catalyst could alter momentum.
As new information comes to my attention, I re-evaluate the merits of the trade and game plan accordingly.
It always help to think about the other market participants in the trade with you. Think about the CYBR bears, their psychology and expectations for a moment:
- – short one of the leading industries
- – short a stock going up as the market trades lower
- – short a stock that is increasing in volume and price