Key takeout
CloudStrike (CRWD) retreated from record highs on Wednesday after cybersecurity providers issued a disappointing quarterly revenue outlook.
The company has announced a stock repurchase program of up to $1 billion, reporting revenue exceeding expectations for the recent quarter. However, CrowdStrike’s second-quarter revenue guidance fell below expectations of $1.14 billion to $1.15 billion.
CrowdStrike shares fell nearly 6% on Wednesday to around $461, leading the Nasdaq Decniners. Despite the sharp decline, the stock price has risen 50% over the past 12 months as the cybersecurity giant recovered from a false software update last July, causing a widespread suspension of Windows PCS.
Below we take a closer look at CrowdStrike charts and use technical analysis to identify key pricing levels that are worth paying attention to.
The momentum of the price to test after revenue
After forming two closely aligned troughs just below the 200-day moving average, cloud strike shares have risen significantly despite inactive trading volumes.
Stock went from rising triangles to an all-time high this week. However, following the cybersecurity provider’s software outlook, the long-term bullish momentum was tested on Wednesday.
Identify three key support levels on CrowdStrike charts where stocks may encounter support, and find important overhead areas to monitor whether stocks resume long-term uptrends.
Key support levels to monitor
The first low level of the watch is around $455. This area on the chart could provide great support near the top trend line of rising triangles and the prominent February swing high.
Below this level, stocks can be raised to the $390 level. The stock could attract support for this location near the trendline linking several peaks formed on the charts between December and April.
More sales will open doors for dropping down support to around $340. Investors could see the area just above the notable March and April valley, given its close proximity to the series of bass that developed on the charts from late November to early January.
Important overhead areas to monitor
If CrowdStrike stocks resume long-term uptrends, investors can monitor overhead areas using measured movement techniques, also known as the measurement principle.
When applied to a CrowdStrike chart, it calculates the distance between the two trend lines of the rising triangle closest to this widest point, adding a breakout area for the pattern. For example, add $55 to $455. This projectes a $510 target.
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