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CrowdStrike Holdings Inc. (NASDAQ:CRWD), the American cybersecurity heavyweight, seems to be on a collision course with a Death Cross — a technical indicator where a stock's short-term moving average dips below its long-term moving average, signaling potential bearish trends ahead.
Chart created using Benzinga Pro
While CrowdStrike’s stock has enjoyed an impressive run over the past year — up 86.54%, with a 12.71% gain year-to-date and a 19.10% surge in the past month — the recent Microsoft outage, including its effect on Delta Air Lines Inc (NYSE:DAL), has cast a long shadow.
The drama started when a buggy software update from CrowdStrike in July caused a global meltdown, crashing millions of Microsoft Windows devices, including those at critical facilities like airports and hospitals.
Delta Air Lines took a direct hit, suffering a $500 million loss and demanding that CrowdStrike foot the bill. Delta isn't playing nice, either — its hired a top-tier law firm to pursue full compensation, while CrowdStrike maintains its liability should be capped in the single-digit millions.
Read Also: Airline Stocks In Trouble: Delta, United’s Death Cross Signals Warning
This dispute has left both companies at odds, but recently, CrowdStrike's CEO George Kurtz extended an olive branch, expressing a desire to thrash out a resolution with Delta.
The market remains spooked. CrowdStrike shares have taken a nosedive, losing over 42% in value in just two weeks and wiping out approximately $40 billion from its market cap.
CrowdStrike’s stock seems to be headed toward a Death Cross.
Chart created using Benzinga Pro
Currently, the stock price is $276.02, hovering below critical moving averages. The 50-day SMA sits at $301.72 and the 200-day SMA is at $299.90, both indicating bearish trends.
Chart created using Benzinga Pro
The MACD indicator is also in the red at a negative 3.63, suggesting further downward momentum. There appears to be slight buying pressure — as CrowdStrike stock's eight-day and 20-day SMAs are slightly below the current price. However, the overall trend leans bearish.
As CrowdStrike battles both technical headwinds and a high-stakes legal showdown, investors might want to keep their shields up.
The Death Cross looms large and unless CrowdStrike can patch up its issues, this stock might continue its downward drift.
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