According to CEH v13 Security Operations and Incident Response, the first step in incident handling is identification and analysis, not immediate containment or remediation. The observed sequence—failed logins followed by abnormal outbound traffic—suggests a potential compromise, but the exact nature, scope, and impact are still unknown.

Option C aligns precisely with CEH v13’s incident response lifecycle. Real-time monitoring and detailed log analysis allow the analyst to determine whether the activity represents credential stuffing, brute-force compromise, malware-based exfiltration, or a false positive. This step preserves evidence, establishes timelines, and helps identify indicators of compromise (IOCs).

Immediately disconnecting the server (Option B) may be necessary later, but doing so prematurely can destroy volatile forensic evidence, disrupt business operations, and alert the attacker. Auditing outbound traffic alone (Option A) is too narrow and skips proper correlation of authentication logs, system logs, and process activity. Forcing credential changes (Option D) without understanding the attack vector may fail to stop malware-based persistence.

CEH v13 emphasizes that containment actions must be informed by analysis, otherwise organizations risk responding to symptoms rather than root causes. Therefore, the correct initial action is to observe, analyze, and identify, making Option C the correct answer.