Long-Term Bull Signal Could Mean a Bounce for Crowdstrike Stock

The security could benefit from a short squeeze, too

Digital Content Manager
Nov 16, 2021 at 3:42 PM
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Cybersecurity name Crowdstrike Holdings Inc (NASDAQ:CRWD) is on the rise today, last seen up 3% to trade at $261.75. The last time we checked on the security, it was sporting historically low implied volatility (IV) on the heels of a record peak. Since then, CRWD has notched a new Nov. 10, all-time high of $297.86, adding to its 98.7% year-over-year lead. And though the equity has once again pulled back quite dramatically from those levels, a long-term area of support could help CRWD back up over the coming months.  

The trendline in question is CRWD's 140-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, four similar signals have occurred over the past three years. The security enjoyed positive returns one month after each signal, and averaged a 10.1% gain. A similar move from the security's current perch would put CRWD just over the $288 level -- much closer to the stock's record high.

CRWD 140 Day

Additional tailwinds could come from a short squeeze, given the 11.36 million shares sold short make up 5.6% of Crowdstrike stock's available float. It would take just over three days to cover these bearish bets, at the security's average pace of daily trading.

It is also worth noting the security has exceeded options traders' volatility expectations in the past year, per CRWD's Schaeffer's Volatility Scorecard (SVS), which sits at 87 out of a possible 100.

 

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