The stock initially rallied off the lows but is back near session lows and down about 3% so far on the day.
That’s despite the company reporting a top- and bottom-line beat with sales growing almost 70% year over year.
Even better? Revenue guidance for its fiscal third quarter and the full year topped analysts’ expectations, with management boosting its full-year outlook for the second time this year.
Analysts are ratcheting up their price targets in response -- and the stock is moving lower on the day.
Trading CrowdStrike Chart
I’m not one to fight price or a trend. If the stock wants to go lower, there’s nothing I — or virtually anyone — can do about it.
That said, there are times where one can believe the reaction is wrong. Acting on that thought is difficult unless there are other reasons to justify a position.
I would argue that an earnings and revenue beat combined with an above-consensus outlook should result in a higher stock price, not a lower one.
When paired with support on the chart, this makes CrowdStrike stock a tempting dip-buying candidate.
Remember, CrowdStrike gave us a buying opportunity a few months ago when it dipped on earnings in June.
If we were talking about a dip to the 10-day moving average as the only support level, I would feel less confident here. Or if the report wasn't very good.
However, not only does CrowdStrike have this short-term moving average in play, but it’s also got the prior breakout zone between $267.50 and $270.
With these two levels on watch and a solid quarterly report, aggressive bulls can buy today’s dip.
Below $265, though, and the trade starts to fall apart.
That could put the 50-day moving average in play, followed by the key $250 level.
On the upside, let’s see if CrowdStrike stock can clear $280. Above that puts the post-earnings high on the table, near $285.50.
Above the all-time high at $289.24 and the $300 to $302 area is a potential upside target, with the 161.8% extension coming into play near the top of that range.
For some traders, this may be too aggressive a setup and that’s just fine. But for others, this is the type of risk/reward setup they crave.