Software stocks have been on a rollercoaster ride this year.

Back in the spring, the group was getting absolutely smoked.

Every week, another software stock was declared dead at the hands of artificial intelligence (AI). The media started calling it the "SaaS Apocalypse."

Everyone hated software!

But as often happens, this extreme negative sentiment marked the bottom. 

The iShares Expanded Tech-Software Sector ETF (IGV) rallied 46% from early April to the start of June. Many stocks within the group went vertical before cooling off.

Since then, IGV has fallen nearly 20% from its June highs. This is a dip we want to buy.

That said, you can’t just buy any software stock blindly. Many former leaders like Oracle Corp. (ORCL) and Palantir Technologies (PLTR) have completely fallen apart. 

However, one corner of the market refuses to break: cybersecurity.

Cybersecurity stocks have held up far better than the average software name. In fact, many of the industry's leaders are sitting near all-time highs despite the carnage elsewhere.

Take a look at the Amplify Cybersecurity ETF (HACK), which invests in a basket of cybersecurity stocks. 

As you can see, HACK is holding up well. It’s starting to build a base on its 21-day moving average. 

For perspective, IGV is currently trading back below its 50-day moving average. 

This is nothing new for cyber. As you can see, the HACK-IGV ratio has been moving up and to the right all year. This simply tells us that cybersecurity stocks have been outperforming the rest of software. 

This trend is showing no signs of slowing down. So, let’s ride it instead of fighting it.

You could buy HACK to cash in on this opportunity. But there are plenty of individual cyber names that also look great. 

Let’s start with one of my favorites: Fortinet (FTNT).

FTNT was one of the software leaders back in May. But unlike many of its peers, it didn’t pull back. Instead, it’s spent the past several weeks building out a base. 

Palo Alto Networks (PANW) also appears to be gearing up for its next leg higher.

Like FTNT, PANW is building a base above its rising 21-day moving average. 

I also love what I’m seeing from Okta (OKTA) and Rubrik (RBRK). 

Cybersecurity is one of the few areas of software where buyers are still firmly in control. That’s what I want to focus on while the rest of the group sorts itself out.

In fact, we already own one of the industry’s leading cyber stocks in my RiskHedge Live portfolio.

I can’t reveal the name here. That wouldn’t be fair to my paying members. But the stock is holding up extremely well (up about 45% from our entry point), and I believe it has more upside ahead.

If you don’t know, RiskHedge Live is my private trading room where members see what I’m buying, when I’m buying it, and when I decide to sell.

If you’d like to trade alongside me—and discover the cyber leader already in our portfolio—you can upgrade to RiskHedge Live here.

Justin Spittler

Director of Trading, RiskHedge