Russian Threat to U.S. Cyber Security Will Send This Company into Hyperdrive

Shah Gilani|April 11, 2022

With sanctions on Russia ramping up, security experts warn that a retaliatory cyber-fight could be coming to the West.

Whether or not a full-blown cyberwar with Russia ever materializes doesn’t matter from a short-term trading perspective.

All that matters is the cyber threat narrative driving stocks higher.

Case in point, the iShares Cybersecurity and Tech ETF (IHAK) has climbed as much as 18.66% since February 24, when Russia invaded Ukraine.

Last week, shares of most cybersecurity stocks pulled back a little in what looks more like a “profit-taking” move rather than a fundamental shift in the need for cyber defense.

My favorite way to play last week’s pullback is CrowdStrike Holdings Inc. (CRWD), the Austin, Texas-based provider of cloud-delivered protection across endpoints and cloud workloads, identity, and data.

CRWD gained more than 50% since Russia invaded Ukraine, but shares pulled back in last week’s trading. That gives us an opportunity to establish a short-term trade to the upside as traders move back into the cybersecurity trade.

At this point, let’s buy the CRWD May 20, 2022 $222/$230 Call Spread for $4.95 or less. Plan on exiting the CRWD May 20, 2022 $222/$230 Call Spread position for a 100% profit or if shares of CRWD close below $205.00.

But that’s not all I’m watching this week.

Sales Soar for Popular Retailers Costco and Target

Last week, Costco Wholesale Corp. (COST) reported upbeat March comparable sales. The news came as a surprise to investors worried about how revenue would hold up one year out from the last stimulus payments.
For the month, same-store sales jumped 17.2% in the five weeks ended April 3, comfortably ahead of consensus and led by a 19.1% increase in U.S. sales. Stripping out gasoline and foreign exchange, same-store sales climbed 12.2%.

As good as those numbers are, I’d like to see shares of COST pull back just a little before targeting the company for another move higher.

If shares of COST trade down to $590 by April 15, 2022, I like buying the COST May 20, 2022 $595/$600 Call Spread for $4.25 or less. Plan on exiting the COST May 20, 2022 $595/$600 Call Spread position for a 100% profit or if shares of COST close below $570.00.

Costco’s March numbers surprised the market, which had a ripple effect on other retailers such as Target Corp. (TGT).

Shares of TGT jumped as much as 6.4% in Wednesday’s trading on the heels of the COST results. That pushed shares of TGT up to the top of the range it’s been trading at since March 1, 2022.

If the stock breaks out above current resistance, we could see shares start another run higher, up to $226 in the near term and $243 after that.

If shares of TGT trade above $230 by April 15, 2022, I like buying the TGT May 20, 2022 $230/$240 Call Spread for $4.90 or less. Plan on exiting the TGT May 20, 2022 $230/$240 Call Spread position for a 100% profit or if shares of TGT close below $205.50.

Tomorrow, check back here for another Take It to the Bank Tuesday, but until then…

Cheers,

Shah