Key takeout
- CrowdStrike’s shares dipped on Wednesday after the company’s quarterly outlook fell short of Wall Street’s expectations.
- The stock previously surged to an all-time high earlier this week but faced challenges in sustaining bullish momentum.
- Investors should keep an eye on critical support levels around $455, $390, and $340, while also monitoring resistance near $510.
CrowdStrike (CRWD) saw a decreased stock price on Wednesday after a less favorable quarterly revenue outlook from the cybersecurity sector.
Although the company recently revealed a stock buyback program valued at up to $1 billion and reported revenue that surpassed prior expectations for the latest quarter, its second-quarter revenue guidance fell short, hovering between $1.14 billion and $1.15 billion.
CrowdStrike’s shares dropped nearly 6% on Wednesday, reaching around $461, which led declines in the Nasdaq. Regardless, the stock has experienced a 50% increase over the last year as it bounced back from a problematic software update last July that temporarily halted Windows PCs.
Let’s take a closer look at CrowdStrike’s stock charts and utilize technical analysis to highlight significant price levels worth observing.
The momentum of the price to test after revenue
Following the formation of two closely placed troughs just below the 200-day moving average, CrowdStrike’s shares have surged noticeably, despite lower trading volumes.
The stock transitioned from ascending triangles to hitting an all-time high this week. But after the company’s software outlook, long-term bullish momentum faced some strain on Wednesday.
We can identify three crucial support levels on CrowdStrike’s charts where the stock might find footing, as well as important overhead areas that could indicate if long-term uptrends resume.
Key support levels to monitor
The first support level to watch is around $455. This area may act as solid support, aligning with the upper trend line of rising triangles and the significant swing high from February.
If prices dip below this, the next support could be around $390, where the stock may find backing near the trendline connecting various peaks formed between December and April.
With further declines, support might be approached around $340. This level is notable considering its proximity to valleys formed in the charts during March and April, as well as the range established from late November to early January.
Important overhead areas to monitor
If CrowdStrike’s stock begins to recover its long-term uptrend, investors should keep an eye on overhead areas through measurement techniques or the measurement principle.
Applying this to CrowdStrike’s chart calculates the distance between the two trend lines of the nearest rising triangle, adding to the breakout zone for the pattern. For instance, if we add $55 to the $455 support level, that projects a target of $510.
