CrowdStrike Holdings (CRWD) was rated a new "Buy" recommendation with a $200 price target by sell-side firm HSBC Friday. Let's review the charts and indicators to see if this is indeed a good time to go long CRWD. In my Aug. 28 review of CRWD, I recommended avoiding the long side of CRWD.
In this daily bar chart of CRWD, below, I can see that prices have started to weaken in recent days. Prices are still above the rising 50-day moving average line and above the rising 200-day line. The trading volume histogram shows that trading volume has declined in September. The On-Balance-Volume (OBV) line is "rolling over" in September and suggests that traders are shifting from being aggressive buyers to becoming aggressive sellers. The Moving Average Convergence Divergence (MACD) oscillator has been narrowing, which tells us that CRWD is losing "trend strength".
In this weekly Japanese candlestick chart of CRWD, below, I see a mixed picture. The most recent weekly candle is a spinning top (small real body) and could become a top reversal pattern if the next candle is bearish (red). Prices are trading above the rising 40-week moving average line. The weekly OBV line shows some limited improvement from December. The MACD oscillator is trying to turn upward.
In this daily Point and Figure chart of CRWD, below, I can see a potential upside price target in the $185 area.
In this weekly Point and Figure chart of CRWD, below, I can see a potential price target in the $235 area -- higher than the fundamental forecast.
Bottom line strategy: If CRWD declines below $160 it will look like (to me at least) a bull trap or a false breakout. Continue to avoid the long side of CRWD.
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