BY MARK SEBASTIAN
June 6, 2024
REPLAY
TRADE IDEA
Each week, my team will give an overview of a stock. I’ll discuss fundamentals, Licia will analyze the charts, and AG will break down the volatility.
Have a stock YOU want us to review? Email my team here. – Mark
Hey Trader,
This week we are looking at Crowd Strike. Breaking down the fundamentals is our main man Frank….Licia will do the charts, and with AG out on assignment I am covering the volatility …so what do you do with CRWD?
Let’s break it down….
An option term got you down? Check out our Glossary here.
Crowdstrike Holdings Inc (Ticker: CRWD)
Cyber-attacks in the public (including government and the military) and private sectors are on the rise. It is a new front in today’s global cold war. That is why I like CrowdStrike (Ticker: CRWD), which is a leading cybersecurity company specializing in endpoint security, threat intelligence, and cyber attack response services.
CRWD has integrated AI and machine learning in its core Falcon platform, which provides endpoint protection through a combination of antivirus, endpoint detection and response, and managed threat hunting capabilities, to identify and stop breaches in real time.
The company also offers comprehensive threat intelligence services that provide insights into cyber adversaries, their tactics, techniques, and procedures, to help organizations anticipate and mitigate threats. If a bad action occurs, CRWD provides incident response services to help organizations quickly contain and remediate security incidents.
CRWD had strong Q4’23 earnings, which caused analysts to respond positively. Despite a positive outlook for the coming year, some analysts have recently tempered their enthusiasm because of insider selling activity by CRWD’s Chief Financial Officer and Chief Security Officer.
Regardless of short term sentiment, CRWD has had strong performance, has very loyal customers and solid products, and is positioned well for future growth.
-Frank
Crowdstrike Holdings (Ticker: CRWD) has been on a steady move higher since bottoming out in early January 2023:
The Japanese Candlestick strategy calls that consolidation a box range.
Each time it looks like a break away from the line, it comes right back to it.
Chevron (Ticker: CVX) has sold off after making a double top and is sitting right on support of the lower level of the pitchfork:
It really ramped up in October of 2023 before it began to consolidate in a range from $300 to $359.
CRWD had a nice 12% move higher after the earnings report bringing it right up to the red median line.
This is resistance which comes in at $342.
Watch what the stock does here, it may roll over lower, consolidate or breakout above.
On a breakout the next resistance level is $359.21 and above that $365 then on to $400.
If CRWD decides to rollover, support sits at $303.91 and then $281.21.
Licia
CRWD generally hangs around a 32% volatility…Ahead of earnings it can get as high as 70%….but typically 30-40 is where this stock lives:
Realized volatility in the name can fly … .in the past when IV is high…it moves more than options are pricing in…and when IV is low it moves less than options were pricing in. CRWD just had earnings on Tuesday night…thus the huge run and subsequent drop in volatility. By the time we do the Ticker highlight show I expect the IV to have fallen further and be near 32. If it is at that level…I’ll be looking to buy options…
What’s the ticker highlight show? It’s a free trading show we do EVERY Monday at 1030 AM ET…you can check out the next episode here.
-AG
Out on Assignment
P.S. To see the live show every Monday at 10:30 just sign up for any paid service here at Option Pit... or call 888) 872 3301.
Questions about anything? Leave a comment below!
Mark Sebastian
Founder & CEO, Option Pit
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