CrowdStrike: A Front Runner Takes a Breather
Back on May 19th, when $CrowdStrike Holdings, Inc.(CRWD)$ was recovering faster than the Magnificent Seven, our fundamental study supported a bullish call that proved to be accurate. Also during the last weeks, this security has been tracked considering the support and resistance levels as suggested by subscribers during this season.
Last weekend, we shared with subscribers that $504 was the central weekly level, and a breach would signal a bearish reversal. That breach occurred on Thursday. The selling pressure was so strong that it also broke through our first support level at $491, with the price closing the week halfway to our next target of $468.
From a technical standpoint, the damage is notable. The price has lost its 5-day moving average, and given this stock's behavior, there's no guarantee the 10-day will act as support. This is compounded by a bearish RSI divergence and a Stochastic that is rolling over from overbought conditions. Alarmingly, the price has also lost the central monthly level of $488.2.
For the bulls to regain control, the price must reclaim both the lost monthly level of $488.2 and the upcoming central weekly level of $490. Until then, the bearish weekly candle, which closed near the low of the week, suggests further downside. In the long term, however, a deep correction could be constructive, allowing the stock to build a new "volume at price" platform, similar to the strong base it formed below $390.
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