Watch These CrowdStrike Price Levels After Delta Files Lawsuit Over July IT Outage

CrowdStrike (CRWD) shares are in the spotlight after Delta Air Lines (DAL) on Friday filed a lawsuit against the cybersecurity provider following a faulty software update in July that brought its operations to a standstill and caused mass flight cancellations.

The Atlanta-based airline alleges that the incident, which also disrupted industries including banks, health care, and media outlets, cost it more than $500 million, along with loss of future revenue and reputational damage.

Despite ongoing concerns of further litigation linked to the software update, CrowdStrike shares have gained around 50% from their early-August low as of Friday’s close amid growing consensus among analysts that the firm sits poised to move past the incident in a strong position.

Below, we analyze the technicals on CrowdStrike’s chart and point out key price levels to watch out for.

Rising Wedge Breakdown

Since bottoming out in early August, CrowdStrike shares have oscillated within a rising wedge, a chart pattern featuring two upward sloping converging trendlines that signals weakening price momentum.

More recently, the stock has broken below the pattern’s lower trendline, potentially setting the stage for a continuation of the downtrend that started in early July, just weeks before the company’s erroneous software update.

The stock was little changed at around $300 in premarket trading Monday.

Let’s identify four important lower price levels on CrowdStrike’s chart that may come into play if the shares continue their move lower from current levels. 

Important Lower Price Levels to Watch

Upon an initial move lower, investors should monitor the $285 level, an area just above the 50-day moving average where the shares could encounter support near a trendline joining multiple peaks and troughs on the chart from January to August.

A close below this level could see the shares decline to around $262. Investors may view this location on the chart as a buying opportunity, given it sits near a horizontal line linking a series of simar trading levels between December and September.

Further selling in the stock opens the door for a bearish move down to the $244 region, where the price could attract support near the January pullback low and prominent early September trough. 

Finally, a longer-term downtrend could see the shares revisit lower support at $172, where bargain hunters may look to place buy limit orders around the September 2023 swing high and October 2023 swing low. This area on the chart also roughly aligns with a bars pattern downside price target that takes the stock’s sharp trend lower from July to August and repositions it from this month’s swing high.

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