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CrowdStrike Stock Surges to All-Time High Despite High RSI

StockInvest.us, 1 month ago

CrowdStrike Technical Analysis

CrowdStrike Holdings, Inc. (CRWD) closed at $298.66 on January 22, 2024, experiencing a 2.79% increase from the previous day. The stock is performing robustly as it also recorded its 52-week high of $302 on the same day. It is significantly above both the 50-day moving average of $242.92 and the 200-day moving average of $175.79, indicating a strong bullish trend. The relative strength index (RSI) stands at 75, which suggests that the stock may be approaching overbought territory.

The Moving Average Convergence Divergence (MACD) value of 6.37 also indicates positive momentum. The Average True Range (ATR) at approximately $2.77 suggests that the stock has a moderate level of volatility. There's no established resistance level beyond the current year high, with the most immediate support level at $273.77 and a calculated stop-loss order of $288.21.

Given the technical setup, the stock's performance for the next trading day and upcoming week is predicted to remain positive but could face a possible pullback or consolidation due to the high RSI level, as traders might look to take profits after recent gains.

Fundamental Analysis

Fundamentally, CrowdStrike's market capitalization stands at approximately $71.39 billion, reflecting a solid company size within the tech sector. However, its Earnings Per Share (EPS) is currently negative at -$0.06, and the stock possesses a highly negative PE ratio of -4,954.5, which is not ideal from a value-investing standpoint. However, the stock market often prices growth stocks based on future earnings potential rather than current profitability.

With an upcoming earnings announcement on March 5, 2024, investor sentiment is likely optimistic based on the recent growth trajectory of the company. CrowdStrike is included in several analyst picks as a 'growth stock to buy and hold,' attributed to its involvement in the cybersecurity industry, a sector with increasing importance and demand. The company's CEO also highlighted the critical nature of cybersecurity in a recent interview, which could strengthen investor confidence in the company's mission and growth potential.

CrowdStrike Stock Evaluation

Despite the negative EPS and a daunting PE ratio, the consensus among analysts is currently a "Buy." The sentiment is backed by 30 'Buy' ratings without any 'Hold' or 'Sell' ratings. Analyst target prices range from $145 to $330, with a consensus target of $224.35. The current price exceeds the consensus target, largely due to the stock's rally towards its year high.

Moreover, the inclusion of CrowdStrike in lists of stocks positioned for long-term growth and a focus on AI-driven cybersecurity suggests a positive outlook influenced by both the company's innovation and market trends.

Overall Evaluation

Based on the available data and the bullish sentiment reflected both technically and fundamentally, the recommendation for CrowdStrike Holdings, Inc. is categorized as a 'Hold.' The technical indicators are largely positive, but the current RSI suggests some caution due to potential overbuying. Likewise, the fundamental indicators point to strong growth prospects, which are already factored into the current stock price.

Investors already holding the stock may want to retain their positions to capitalize on potential future gains, particularly with anticipation of positive earnings. However, new investors might consider waiting for a more opportune entry point, particularly if a technical correction occurs due to the stock's rapid ascent and high RSI.

The fundamental growth story remains strong for CrowdStrike; thus, current investors might continue to 'Hold' to ride the stock's momentum, while new investors could look for short-term pullbacks as potential buying opportunities.

Check full CrowdStrike forecast and analysis here.