Here's Where Traders Should Stop Out on CrowdStrike

Shares of cybersecurity firm CrowdStrike CRWD is selling off Thursday on downgrades from the sell-side firm Redburn Atlantic.

Let's check out the charts and indicators.

In this daily bar chart of CRWD below, I can see that prices have broken down below the still-rising 50-day moving average line. The trading volume does not look like it has increased on the decline but the daily On-Balance-Volume (OBV) line has declined and suggests that sellers of CRWD are being more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator has turned sharply lower since June and is close to the zero line.

In this weekly Japanese candlestick of CRWD below, I can see a large bearish engulfing pattern in June/July. This top reversal pattern has started the ball rolling to the downside. Trading volume was heavy into the high and suggests a possible change of ownership from strong hands to weaker hands. The weekly OBV line has begun to turn lower. The MACD oscillator is in a downward correction.

In this daily Point and Figure chart of CRWD below, I can see a nearby downside price target in the $337 area.

In this weekly Point and Figure chart of CRWD below, I can see a price target in the $281 area.

Bottom line strategy: In my July 2, 2024, review of CRWD, I recommended that "Traders who may be long CRWD should consider raising stop protection or trimming their long position. We adjusted our recommendation on CRWD on June 27." 

Traders should be stopped out at $360.

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