To The Moon

Introduction

$CrowdStrike Holdings, Inc.(CRWD)$ CrowdStrike is a cybersecurity company that uses AI and ML to provide advanced threat detection and prevention capabilities. The company has reported consistent growth in revenue and customer base over the past four quarters. However, the short-term outlook for the stock is not very optimistic, and I plan to buy put options to take advantage of the possible sell-off after the earnings report.

Short-term Outlook

Although CrowdStrike has beaten consensus estimates for the past four quarters, the RSI14 is quite high at 67.75, and the tom demark sequence 9 indicator count is currently at 8 based on yesterday’s closing (see chart below). If the earnings report is very good, the stock could go higher and form the perfect sell with bearish 9 counts. Therefore, I am not optimistic about the stock in the short term. A short explanation tom demark sequence 9 indicator count and perfect sell is appended at the end of the article.

CRWD at count 8 for TD sequence

Trading Strategy

I plan to buy put options at 137 $CRWD%2020230324%20137.0%20PUT$ $CRWD 20230324 137.0 PUT$  and 140 $CRWD%2020230324%20140.0%20PUT$ $CRWD 20230324 140.0 PUT$  around the resistance level(see chart below), expiring two weeks later. I chose options expiring later to take advantage of the possible overbought condition of the stock. However, as with stocks related to AI, the hype is still there, and there is still a good chance that the stock will go higher. Therefore, I plan to keep my profits small and close our positions when the perfect sell does not form.

CRWD resistance levels

CrowdStrike and AI

AI can greatly improve threat detection and response, automate routine tasks, and provide advanced threat intelligence capabilities. By leveraging artificial intelligence (AI) and machine learning (ML), CrowdStrike's Falcon platform can analyze large volumes of data in real-time, identify patterns and anomalies, and prevent cyber attacks before they can cause damage. This can lead to increased customer satisfaction and loyalty, as well as new customer acquisitions. 

Crowdstrike's Falcon Platform

Moreover, as the field of AI continues to develop and expand, CrowdStrike is well-positioned to leverage these advancements to further improve its cybersecurity offerings. This potential for future innovation and growth is likely to be viewed positively by investors, and could contribute to upward momentum in the company's stock price.

That being said, it's important to note that the hype around AI and its potential applications can sometimes lead to overvaluation of companies operating in this space.

Financial Results

CrowdStrike has reported consistent growth in revenue and customer base over the past four quarters. The company reported total revenue of $380.7 million in the third quarter of fiscal year 2023, representing a year-over-year increase of 41%. However, the company has reported net losses in each of the four quarters of fiscal year 2022 and in the first two quarters of fiscal year 2023. Nevertheless, these losses have been decreasing consistently across all four quarters of fiscal year 2022 and in the first two quarters of fiscal year 2023.

Conclusion

CrowdStrike has shown consistent growth in revenue and customer base over the past four quarters. However, the short-term outlook for the stock is not very optimistic, and I plan to buy put options to take advantage of the possible sell-off after the earnings report. With the hype still surrounding stocks related to AI, I plan to keep my profits small and close my positions when the perfect sell does not form.

Tom Demark TD9 Sequence and Perfect Sell Setup

The Tom Demark TD9 Sequence and Perfect Sell Setup are technical analysis tools used to identify potential trend reversals in financial markets. The TD9 Sequence is a series of nine consecutive bars, where the high or low of the current bar is greater or lower than the corresponding high or low of the bar four bars prior. The Perfect Sell Setup occurs when the TD9 Sequence reaches its ninth bar and a new high is not made, indicating that the upward trend may be coming to an end. This setup is often used by traders to enter short positions or exit long positions. It is important to note that the TD9 Sequence and Perfect Sell Setup are just one of many technical analysis tools available, and should be used in conjunction with other indicators and analysis methods to make informed trading decisions.