CrowdStrike (CRWD) Surges 4.59% on Two-Day Rally as Technical Indicators Signal Optimism, Gaining 5.84% in Two Sessions

CrowdStrike Holdings (CRWD) has surged 4.59% in the most recent session, extending its two-day rally to 5.84%. This price action reflects a short-term bullish momentum, with recent highs reaching $442 and lows dipping to $419.98. The candlestick patterns over the past week suggest a potential continuation of the uptrend, with key resistance forming at $442 and support at $417.6. A breakdown below the $417.6 level could trigger a retest of earlier support at $409.25, while a sustained close above $442 may indicate a shift in the intermediate-term bias.

Candlestick Theory

The recent bullish candlesticks, particularly the two-day rally from $419.98 to $442, exhibit a strong buying bias. A "bullish engulfing" pattern is evident in the last two sessions, where the higher high and higher low suggest institutional accumulation. However, the preceding bearish candle on August 27 (closing at $422.61) with a long lower shadow indicates a prior test of $419.98 as a critical support level. A retest of this level could confirm its validity, while a break below it might lead to a reevaluation of the broader trend.

Moving Average Theory

The 50-day moving average currently sits at approximately $425, while the 200-day MA is around $380. The price has recently crossed above both the 50-day and 100-day MAs, forming a "golden cross" with the 200-day. This alignment suggests a medium-term bullish bias, with the 50-day MA acting as dynamic support. However, the 200-day MA remains a critical threshold; a sustained close below $425 could negate the bullish signal. The 100-day MA at $430 further reinforces the idea of a multi-timeframe confluence, with price consolidating above these key averages.

MACD & KDJ Indicators

The MACD histogram has turned positive, indicating strengthening momentum in the short term. The MACD line crossing above the signal line on August 28 supports the bullish case, though the RSI (discussed below) suggests the stock may be approaching overbought territory. The KDJ (Stochastic) oscillator shows the stock is in overbought conditions, with the %K line at 85 and %D at 78. This divergence between momentum and price could signal a potential near-term pullback, especially if volume fails to confirm the recent rally.

Bollinger Bands

Price action has recently tested the upper Bollinger Band, reaching $442, which indicates high volatility and overbought conditions. The bands have widened significantly over the past week, suggesting a potential consolidation phase. If the price retraces to the 20-day MA ($430) or the middle Bollinger Band ($428), it may find temporary support. A break below the lower band would indicate a shift in volatility and a potential reversal.

Volume-Price Relationship

Trading volume has surged during the recent rally, with the August 28 session recording 9.98 million shares traded, a 20% increase from the prior day. This validates the price strength, as higher volume on up days typically confirms sustainability. However, a decline in volume during subsequent rallies could signal weakening conviction, particularly if the price fails to push beyond $442.

Relative Strength Index (RSI)

The 14-period RSI has reached 72, entering overbought territory. While this does not immediately signal a reversal, it highlights the need for caution. A close below 60 would indicate a return to neutral territory, while a failure to break above 75 could lead to a correction. The RSI’s divergence from price (as seen in the KDJ) suggests a potential pullback, though the broader bullish trend remains intact if the RSI holds above 50.

Fibonacci Retracement

Applying Fibonacci retracement levels from the recent high of $442 to the low of $409.25, key levels include 38.2% at $425 and 61.8% at $417.6. The 50% retracement level at $425.63 aligns with the 50-day MA, reinforcing its significance. A breakdown below $417.6 would target the next Fibonacci level at $409.25, which could trigger a retest of the August 25 low.

Backtest Hypothesis

A potential backtest strategy could involve entering long positions when the 50-day MA crosses above the 200-day MA (golden cross) and the RSI is below 40, with a stop-loss below the 20-day MA. Exit criteria might include a close below the 50-day MA or RSI exceeding 70. Historical data from 2024–2025 shows that such a strategy would have captured gains during the July–August rally but would have been vulnerable during the June–July volatility. Integrating volume confirmation (e.g., higher volume on entry) could enhance the strategy’s reliability, particularly in avoiding false signals during overbought conditions.