If you use the Internet, you were likely caught in the crossfire Wednesday of the largest cyber attack – ever.
Did it stem from China? North Korea? Iran?
No.
It came from The Netherlands.
It all started when Internet watchdog Spamhaus blacklisted alleged spamming outfit, Cyberbunker. Cyberbunker is a web hosting company that apparently represents some unsavoury businesses that use spam marketing in their normal course of business. Or so thinks Spamhaus…
Well, Spamhaus is empowered to shut down web sites it thinks are violating spam laws and deny those companies the very ability to conduct business.
Cyberbunker’s response to being shut down, unfortunately, has been like that of a petulant child, and its tantrum was not simply directed at the source. It launched denial-of-service attacks EVERYWHERE. As a result, vital Internet infrastructure has been clogged and most users at the very least have experienced slow connections – worldwide.
But apparently this cyber attack has nothing to do with the one yesterday on Wells Fargo.
An Islamic terrorist group is claiming responsibility for that one. Like Cyberbunker, these were also denial-of-service attacks making it very difficult for customers to access Wells Fargo’s site.
The group, Izz ad-Din al-Qassam, reportedly went after JPMorgan earlier this March using similar tactics.
While we all witness bigger and bigger cyber attacks every day, cyber-attack investing isn’t a new idea by any stretch. Naturally, investors increasingly look to the primary public players in the space as potential buys:
Check Point Software Technologies (NASDAQ: CHKP)
Sourcefire (NASDAQ: FIRE)
Fortinet (NASDAQ: FTNT)
Imperva (NASDAQ: IMPV)
ProofPoint (NASDAQ: PFPT)
Guidance Software (NASDAQ: GUID)
Websense (NASDAQ: WBSN)
Radware (NASDAQ: RDWR)
From a fundamental perspective, Check Point is arguably on the most solid footing, generating returns on invested capital (ROIC) at or above its own cost of capital. The rest are either generating returns below their capital costs or not generating positive ROIC at all.
Sourcefire (NASDAQ: FIRE) just so happens to stand out from the group mentioned above because of its strength in trend – a near perfect 45 degree angle in trajectory. In fact, the stock has been on a tear since 2009 interrupted only by natural and necessary periods of consolidation.
Let us be clear about this. FIRE is an attractive trade based on technicals alone. Here’s why…
In the candlestick chart below we’ve labeled two key “buying areas” that investors should look to establish an initial stake or add shares to an existing position.
FIRE is Very Attractive Technically
The bottom horizontal line at $30 per share acts as strong support for buyers because this invisible line has been ‘respected’ several times (see circled areas) as a reversal point for investors indicating momentum shifts.
More recently, FIRE shares fell back to $40 support in the form of a technical flag pattern and subsequently reversed to march even higher, giving us yet another bullish move and confirming the bigger-picture trend.
Investors looking to capitalize on the rush to minimize cyber-security risks should give Sourcefire a serious look as it approaches $40 per share.