The cybersecurity technology company based in Sunnyvale, California that provides endpoint security, threat intelligence, and cyberattack response services, Crowdstrike Holdings Inc. (NASDAQ: CRWD) seem to be poised for a price surge as per its latest charts.
Bullish Indications
#1 Falling Wedge Pattern Breakout: As you can see from the daily chart, CRWD was trading within a falling wedge pattern during the past few weeks. This is marked in the daily chart in pink color. Currently, the stock has broken out of the falling wedge pattern with high volume. A Falling Wedge Pattern is a bullish pattern. Once the stock breaks out from it, it has the potential to move further up.
Daily Chart – CRWD
#2 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is currently above the signal line (orange color). This is a possible bullish setup.
#3 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart.
This indicates possible bullishness.
#4 Above MA: In the daily chart, the stock is currently trading above its 50-day as well as 20-day SMA.
This implies that the bulls are currently in control.
#5 Bullish RSI: The RSI is currently above 50 and moving higher.
This is a possible bullish sign.
#6 Downtrend Broken in Weekly Chart: As evident from the weekly chart, the downtrend of the stock has now been broken. This is marked in purple color in the weekly chart. This is a possible bullish sign.
Weekly Chart – CRWD
#7 Bullish RSI: The RSI is currently moving up and is near 50. This is a possible bullish sign.
#8 Bullish Stochastic: The weekly chart shows that the %K line is above the %D line in the stochastic. This indicates that an upmove may be imminent.
#9 Double Bottom Pattern: The stock is currently forming a double bottom pattern. This double bottom pattern is marked in the weekly chart in orange color. This is a bullish reversal pattern and the breakout from it usually indicates that the stock could possibly move upwards.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of CRWD above yesterday’s close. This translates to a price of around $55.15.
TP: Our target prices are $60 and $70 in the next 4-6 months.
SL: To limit risk, place stop-loss at $52.40. Note that the stop loss is on a closing basis.
Our target potential upside is 9% to 27% in the next 4-6 months.
For a risk of $2.75, our target rewards are $4.85 and $14.85. This is an almost 1:2 and 1:5 risk-reward trade.
In other words, this trade offers nearly 2x to 5x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the channel and the falling wedge pattern with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
Tara
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