Are you following the crowd on CrowdStrike ($CRWD)? Here’s your trade – October 10, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I want to talk about CrowdStrike ( NASDAQ: CRWD ) here.
You know what happened, they really blew it. The stock took a big hit, almost a 50 percent hit from where it was. Since the sell-off was done, and buy the sell-off didn’t really work out for quite a few days, actually like a couple of weeks until finally it did.
Now this thing’s climbing back up. It’s finally just today cut through the 200-day moving average. If you’re just looking at this price picture you can see this kind of trade. This kind of triangle is like a bearish pennant. The idea is that you’ve got higher highs and higher lows, but they’re converging.
The lows are coming up closer and closer to the highs. The volume is not that great back here. It got a nice move higher, probably because it’s popping above the 200. But you want to be careful about this kind of move. Because most of the time, not all the time, but most of the time when you see these bearish wedges like this, they tend to fail.
They tend to ultimately fall out the front of the megaphone here. This kind of looks like a megaphone. This is the big hole where the sound goes out. This is the little hole where the voice goes in. So they tend to just kind of fall out here, like this.
I’m just suggesting you be careful with this. I have some stock, and I also have some call options, the 300 calls, November strike. I’m profitable on those; 6 percent is not a big deal at all. Frankly, I’m probably not going to keep them very long because I feel like this stock is right back to the bottom of this gap.
You can see where this stock gapped down, I’m just looking at closing prices here, not really anything else. It’s trying to get into this gap, and so far it’s not quite doing it. So I look at this gap and it just seems to me like we could have more selling pressure. That’s not always the case, sometimes this thing will climb right through.
So you can say the more cynical of you, and I see these stupid comments from trolls, so what do we do? Dude, it’s a free video, you get what you pay for, sorry. But with that said, you’ve got to manage your risk. So if you’re buying this breakout, for me, the way to do it is, I like it here.
If the stock falls back below its low here, its open price, if it falls back below there, well then this breakout is suspect. Because it tried to get up above the 200 here, it couldn’t do it. Then you see the pattern that I just drew, so this would be a logical thing for this if it fails to fall all the way down here.
A real tight stop would be at about a little over 3 percent from the 200-day moving average. If you want to be a little more aggressive, you can have the stop clear down here where mine is at 280.00. So what I’ve done is given you two risk profiles, one that’s really, really tight based on a swing trade, a breakout above the 200, And one that’s looser, just based on dropping below the last week or so of price action.
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