CrowdStrike’s Colossal Fail: Here are the Crucial Trading Levels to Watch Now! | Don’t Ignore This Chart!

On July 19, just about everyone felt the ground shake when security vendor CrowdStrike (CRWD) rolled out a botched software update that caused Windows systems to crash worldwide and caused the infamous Blue Screen of Death (BSOD) to appear on millions of screens. Crowdstrike’s stock fell 11% on Friday and fell more than 13% on Monday.

The next day, I was trying to check in for a United flight when I suddenly got a notification that my flight had been canceled. It only took a second to figure out that CrowdStrike was the cause of the mess.

Crowdstrike News Trading Preparation

If you’ve been watching the market, you’ve probably guessed that CRWD will take a hit while its competitor Palo Alto Networks (PANW) will rise. CRWD, the second-largest cybersecurity company in the U.S., has decent fundamentals. But the biggest question is how it will handle the coming customer lawsuits.

If you are bullish on CRWD and think it will recover from the disaster (which it hasn’t yet), the recent decline presents a great buying opportunity. Let’s assume this is what you are looking for. Here are the key levels to watch:

CrowdStrike: Key Levels to Watch

Check out CrowdStrike’s daily chartsYou can see that CRWD was already overextended before the July 19th mistake (check the black dotted line). This is Relative Strength Index (RSI) and Chaykin Money Flow (CMF).

Chart 1. Daily chart of CROWDSTRIKE. CRWD has entered a buy zone, but keep an eye on momentum (and news).

This is an important “technical” notation, but I hope it continues to be noted. Further negative media coverage could make the situation worse. (stories of continued failure, commercial impact, potential litigation, etc.)

With this in mind, let’s take a look at Fibonacci corrections. Levels (blue) and support/previous resistance (green dotted lines). Buyers jumped in at $245, where the 50% Fibonacci and upper support levels converge. If the price continues to plunge, the range between $245 and $207, where the 61.8% Fibonacci and second support levels converge, becomes a strong buying point.

Ichimoku Cloud It provides a picture of the expected uptrend (if it continues) as well as the range. Potential support On the upper side of the price movement. If the price breaks below $207, it would be worth re-evaluating the technical, fundamental and news-driven context.

The Close

The second largest U.S. cybersecurity company, CRWD, is facing difficulties and potential lawsuits, but the recent stock price drop could be a buying opportunity for the optimistic. Watch the momentum, buy levels, and news updates. The company’s situation could get much better or much worse in the coming weeks.

PS Grayson Roze’s ChartWatchers post on CrowdStrike

Chart 2. What Grayson Rose says about CrowdStrike’s price action.

Grayson Roze is watching the charts and wondering, “Is this a big bullish moment for CRWD?” The stock just bounced from a previous resistance level to support and the 200-day MA, showing a long-term uptrend. If this bottom holds, we could see a bullish formation. The recent CrowdStrike disruption took half the internet offline, showing the important role played by companies like Amazon and Google. Roze uses a traffic light indicator. Mark bullish, bearish and neutral zones for ACP and set thresholds based on your analysis.

Check out his chart here.

disclaimer: This blog is intended for educational purposes only and should not be construed as financial advice. The ideas and strategies should not be used without first evaluating your personal and financial situation or consulting a financial professional.