Watch These CrowdStrike Price Levels as Stock Drops From Record High on Light Outlook

CrowdStrike (CRWD) shares retreated from their record high on Wednesday after the cybersecurity provider issued a disappointing quarterly revenue outlook.

The company reported better-than-expected earnings for its latest quarter and announced a share repurchase program of up to $1 billion. However, CrowdStrike’s guidance of fiscal second-quarter revenue of $1.14 billion to $1.15 billion came in below Wall Street Expectations.

CrowdStrike shares fell nearly 6% to around $461 on Wednesday, leading Nasdaq decliners. Even with the sharp decline, the stock has gained 50% over the past 12 months, as the cybersecurity giant has recovered from an erroneous software update last July that caused a widespread outage of Windows PCs.

Below, we take a closer look at CrowdStrike’s chart and use technical analysis to identify major price levels worth watching out for.

Bullish Price Momentum Put to Test After Earnings

After forming two closely aligned troughs just below the 200-day moving average, CrowdStrike shares have trended sharply higher, albeit on lackluster trading volume.

The stock broke out from an ascending triangle to an all-time high this week in a move that coincided with the relative strength index nudging toward overbought territory. However, longer-term bullish momentum was tested on Wednesday following the cybersecurity provider’s soft outlook.

Let’s identify three major support levels on CrowdStrike’s chart where the shares may encounter support and also locate a key overhead area to monitor if the stock resumes its longer-term uptrend.

Major Support Levels to Watch

The first lower level to watch sits around $455. This area on the chart would likely provide significant support near the ascending triangle’s top trendline and the prominent February swing high.

A close below this level could see the shares retrace to the $390 level. The shares may attract support in this location near a trendline that links several peaks that formed on the chart between December and April.

Further selling opens the door for a drop to lower support around $340. Investors could see this region, which sits just above the notable March and April troughs, as a longer-term floor given its proximity to a series of lows that developed on the chart from late November to early January.

Key Overhead Area to Monitor

If CrowdStrike shares resume their longer-term uptrend, investors can project an overhead area to monitor by using the measured move technique, also known as the measuring principle.

When applied to CrowdStrike’s chart, we calculate the distance between the ascending triangle’s two trendlines near this widest point and add that amount the pattern’s breakout area. For example, we add $55 to $455, which projects a target of $510.

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As of the date this article was written, the author does not own any of the above securities.