The recent turmoil in the stock market has left investors reeling, with CrowdStrike (CRWD) shares taking a significant hit. The cybersecurity company, known for its cutting-edge technology and innovative solutions, has seen its stock price plummet by 23% over the last two trading sessions. This dramatic decline comes on the heels of a software update that caused widespread disruption at banks, airlines, broadcasters, and numerous other businesses.
Key Takeaways
CrowdStrike shares remain under pressure as investors assess the fallout from the software update debacle. The stock price first showed signs of weakness last Thursday when it closed below the 50-day moving average. The situation worsened on Friday when the stock gapped sharply lower, and it closed below the 200-day moving average on Monday. As the selling continues, investors are advised to monitor key support levels on the chart at $261, $212, $190, and $172.
Stock Falls Below Key Moving Averages
Since reaching a low point in January 2023, CrowdStrike shares had been on an upward trajectory. Momentum picked up after the 50-day moving average crossed above the 200-day moving average last June, signaling a golden cross and the beginning of a new uptrend. However, recent events have caused the stock price to falter. Last Thursday, the stock closed below the 50-day moving average, and on Friday, it gapped down significantly due to the software update mishap. The downward trend continued on Monday, with the stock closing below the critical 200-day moving average. The sell-off has been accompanied by substantial trading volume, indicating strong conviction behind the downward movement.
Levels to Monitor Amid Ongoing Selling
As the selling pressure persists, it is essential to keep an eye on key support levels where the stock may find some relief. The first level to watch is $261, where the stock could find support from the December swing high and an uptrend line dating back to January 2023. This area may also present an opportunity for a short-term bounce, as the relative strength index (RSI) suggests that the stock is deeply oversold. If the stock breaks below $261, the next level to watch is $212, where buyers may step in near a consolidation period preceding a late-November gap in the stock price.
Further weakness could see the stock test support around $190, where a swing high from October last year may provide a floor for the stock’s decline. If selling pressure intensifies, the stock could drop to $172, where a horizontal line connecting a peak and trough from September to October last year may offer support.
In conclusion, the recent turmoil in CrowdStrike’s stock price underscores the importance of monitoring key technical levels during periods of heightened volatility. By staying informed and being prepared for various scenarios, investors can navigate turbulent market conditions more effectively.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. As always, investors should conduct their research and consult with a financial advisor before making any investment decisions.
