2nd Skies Trading

CrowdStrike Is Firing On All Cylinders And Is Worth Buying

That the world has gone digital is no news. And if any company was having doubts about going digital, the pandemic has sure cleared those doubts. But the more establishments go online, the more targets hackers and cyber threats have. Enter CrowdStrike Holdings (Nasdaq: CRWD)

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CloudStrike majors in cloud-based cybersecurity. It helps companies protect their online data from cyber threats and potential data breaches without any on-site appliance installations. All the client needs to do is to install security modules from the cloud and make sure to update them regularly.

Its flagship product, Falcon, is a cloud-based platform that offers quick threat detection across multiple platforms. Falcon relies on machine learning and the 1 trillion signals it monitors daily to get smarter the more it’s being used, and it also uses artificial intelligence to detect potential threats.

Already, CrowdStrike has grown its customer base by 81% year on year from over 7,000 to 13,000 in the second quarter of FY 2022. Of the company’s subscribers, 66% have subscribed to four or more modules. And with a customer retention rate of 98%, it’s obvious that this product is loved by anyone who touches it.

The financials of the cyber security company is red-hot, as the company claimed a 70% year-on-year revenue increase in Q2 FY22 to $337 million.

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Being a leader in the cloud-based cybersecurity space, the market opportunity for CrowdStrike is vast. As long as there are cyber threats, which continue to soar to new highs annually, CrowdStrike would always have new customers and bigger opportunities to grow.

Technical Analysis

CRWD has been climbing up a steep ascending trendline it embarked on shortly after its IPO in 2019. And it doesn’t look like it’s out of gas yet.

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It recently touched the trendline with the wick of its latest candlestick. This point of contact also coincides with where the price makes contact with the $236 – $247.5 support level. These two suggest that the price is likely going to continue its strong bullish run and break its ATH of $298

It’s obvious that Crowdstrike is not cheap at $262 per share. But we can only see this stock getting more expensive in the near future.

Option Positioning

Currently option traders have about 126,000 calls and 188,000 put options on $CRWD with about 35% of them expiring this Friday.

That suggests short term, there could be headwinds as we get closer to the expiry. Option positioning and open interest suggests there is support around $250, which we traded and shared with our trading masterclass yesterday. Today, the stock closed at $262, $12 above our $250 bottom call yesterday.

FULL DISCLOSURE: Chris Capre currently had live trades in $CRWD till today, and now just has pending orders on $CRWD. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

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