Business

Attack the crowd before the income: Attack now or avoid the crowd?


Cybersecurity company CrowdStrike Holdings (CRWD) is expected to report its latest quarterly figures to shareholders after the close of trading on Tuesday. In Our May 31 review of CRWD we wrote that traders can “…risk up to $142. $200 and $235 are our potential price targets in the coming weeks.”

CRWD hit our $200 price target in August but then dropped again. Hopefully traders have made a profit and avoided the next drop.

Please check the charts again.

In CRWD’s updated daily bar chart, below, we can see that the stock has been on a downtrend over the past 12 months. The price is trading below the descending 50-day moving average and below the bearish 200-day moving average.

The On-Balance-Volume (OBV) line that has declined over the past three months tells us that CRWD sellers have been more active than buyers. The Moving Average Convergence Divergence (MACD) oscillator has been in a bearish zone since the beginning of September.

In CRWD’s weekly Japanese candlestick chart, below, we see a longer-term bearish picture. Stocks are in a downtrend as they trade below the bearish 40-week moving average.

Volume is neutral and the weekly OBV line is flat. The MACD has been in the bearish zone all year.

In this daily CRWD Point and Figure chart, below, we can see a potential downside price target in the $78 region.

In this weekly CRWD Point and Figure chart, below, we can see that the price has reached its downside price target in the $90 region.

Final strategy: I have no particular knowledge of what the top leaders at CRWD will tell shareholders and analysts on Tuesday night but the charts appear to be pointing lower. A temporary bounce cannot be ruled out but without a base I don’t expect a sustained rally. Now avoid the long side of CRWD.

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