Watch These CrowdStrike Price Levels After Stock Surges to Record High

CrowdStrike (CRWD) shares are likely to remain in focus after surging more than 9% Tuesday following news of a cyber attack against Chinese AI startup DeepSeek.

The security incident follows reports that DeepSeek’s AI model can compete with leading American AI technology, such as OpenAI’s ChatGPT, at a significantly lower cost, The attack may have boosted expectations among investors that cybersecurity firms, such as CrowdStrike, stand to benefit from increasing demand for their offerings as the race for AI leadership intensifies in coming years.

Sentiment toward the stock may have also received a lift after the company said Tuesday that its Falcon cybersecurity platform achieved a perfect score in a real-world ransomware test. CrowdStrike shares have jumped nearly 20% since the start of the year and trade 41% higher over the past 12 months. The stock closed Tuesday at around $409.

Below, we break down the technicals on CrowdStrike’s chart and identify key price levels that investors may be monitoring.

Rectangle Pattern Breakout

Since the 50-day moving average (MA) crossed back above the 200-day MA in late November to form a golden cross, CrowdStrike shares have consolidated within a rectangle formation, a chart pattern that signals a continuation of the stock’s longer-term uptrend.

Indeed, the price staged a decisive volume-backed breakout above the pattern’s upper trendline on Tuesday, setting the stage for further upside.

Moreover, the relative strength index (RSI) confirms bullish price momentum with a reading above the 70 threshold, though it also places the indicator in overbought territory, increasing the possibility for short-term profit-taking.

Given the stock’s move into price discovery mode, let’s use technical analysis to forecast a potential upside target and also identify two key support levels to watch during pullbacks.

Upside Target to Monitor

Investors can forecast how a continuation move to the upside may look by using the bars pattern tool. 

To apply the technique to CrowdStrike’s chart, we extract the price bars comprising the stock’s trend higher from October 2023 to February last year and reposition them from Tuesday’s breakout, which predicts a target of around $735, 80% above today’s closing price.

We selected this prior trending move as it followed a breakout from an earlier rectangle pattern on the chart, potentially providing clues to how a new continuation move may play out from a similar setup if price action rhymes.

Key Support Levels to Watch

During profit-taking periods, investors should initially track the $378 level. The shares may encounter buying interest in this area on retracements to the rectangle pattern’s top trendline, which may flip from a location of prior resistance into future support.

Finally, the bulls’ inability to defend the above level could see CrowdStrike shares drop to around $338, a region where investors may look to open positions near a horizontal line that stretches back to last February’s prominent peak, which also forms the rectangle pattern’s lower trendline.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.