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CrowdStrike Shows Strong Bullish Momentum Amid Mixed News and Potential Resistance Ahead

StockInvest.us, 4 weeks ago

CrowdStrike Technical Analysis

CrowdStrike Holdings, Inc. (CRWD) closed at $320.21 on October 11, 2024, marking a 1.68% increase from the previous close. The stock is displaying a strong upward momentum with its Relative Strength Index (RSI) of 66, indicating proximity to overbought conditions, yet suggesting further potential for gains. The recent price surge has widened the gap between the 50-day moving average ($267.59) and the current price, accentuating bullish sentiment. Moreover, the stock is trading above the 200-day moving average of $306.12, which typically implies a long-term upward trend.

The MACD of 12.29 supports the bullish outlook, showing a positive divergence. CrowdStrike is approaching a pivotal resistance level at $343.05, where it may encounter selling pressure. On the downside, initial support is pegged at $304.96, with a stop-loss around $310.03. The Average True Range (ATR) of 3.14 suggests moderate volatility, allowing some room for price fluctuations.

Fundamental Analysis

CrowdStrike's market capitalization is approximately $78.50 billion, reflecting a robust market position. With a P/E ratio of 457.44, the stock appears overvalued compared to industry norms, signaling investors' high growth expectations. The company has an EPS of $0.70, with its earnings announcement scheduled for November 26, 2024, a crucial date that could influence investor sentiment.

According to discounted cash flow (DCF) analysis, CrowdStrike's intrinsic value is around $379.87, indicating that the stock is currently undervalued by approximately 18.64% relative to this measure. Analyst sentiment remains favorable, evidenced by a consensus target price of $322.42, with a strong buy/buy count outweighing hold recommendations.

News Impact

CrowdStrike Recent media suggests mixed implications for CrowdStrike. While the company was negatively highlighted in Delta Air Lines' Q3 earnings report due to an outage that impacted results, general sentiment remains bullish. Headlines underscore CrowdStrike's resilience and potential in the AI sector, painting an optimistic long-term picture. Additionally, its inclusion in discussions around AI stocks to hold for decades supports a positive growth trajectory.

Stock Performance Prediction

For the next trading day (October 14, 2024), CRWD may witness a slight pullback or consolidation due to near-term resistance. The stock could experience volatility influenced by the recent news cycle, but overall, the technical indicators suggest a likelihood of maintaining its upward trajectory.

Over the upcoming week, further gains could materialize if the stock successfully breaks past the $343.05 resistance. Investors should watch for volume changes and any new developments in its AI initiatives or further impacts related to the prior outage.

Long-Term Investment Potential

In the longer term, CrowdStrike's position as a key player in cybersecurity and AI solutions supports continued growth. The intrinsic undervaluation as per DCF analysis, alongside a strong bullish consensus, suggests significant investment potential. However, the high P/E ratio implies that growth must continue robustly to justify current valuations.

Overall Evaluation

Categorically, CrowdStrike appears as a 'Buy' candidate in light of its strong technical position, favorable analyst sentiment, potential undervaluation, and promising long-term growth themes in AI. However, investors should remain cautious of high valuation metrics and monitor news for any developments that could sway short-term dynamics.

Check full CrowdStrike forecast and analysis here.