CRWD Bull Flag Forms as Cybersecurity Stocks Soar

Over the past few weeks, market momentum has accelerated in an almost V-shaped way. But within that broader rally, a handful of sectors have pulled away from the pack entirely, outperforming the market with impressive consistency. Themes like battery tech, utilities, AI infrastructure, and especially cybersecurity have all shown remarkable strength. 

Many top-performing stocks in these industries are trading near or at all-time highs.

One standout sector is technology software, and more specifically, cybersecurity. Immune to the trade war narrative and ongoing tariff tensions, several cybersecurity names have broken out in recent months. For example, Zscaler NASDAQ: ZS and Fortinet NASDAQ: FTNT are trading near record levels. Another major player showing strong relative strength is CrowdStrike Holdings Inc. NASDAQ: CRWD, up 29% year-to-date and just 2.9% from its 52-week highs. 

With a bullish chart setup taking shape, could CRWD be gearing up for another leg higher?

CrowdStrike Forms a Bull Flag: Time to Buy?

From a technical standpoint, CRWD’s chart is one of the more compelling setups in the market right now. The stock is consolidating just below key resistance near $450 in what appears to be a textbook bull flag pattern.

This bullish consolidation breakout pattern often signals a pause before a breakout higher.

This consolidation is happening well above rising key moving averages, a sign of strength. The $420 zone has acted as support throughout this recent range, while $447–$450 has established itself as firm resistance.

For traders watching the breakout closely, a move above $450, especially on substantial volume, would confirm a breakout and could trigger another wave of momentum buying.

As CRWD heads into earnings, the setup has short- and medium-term traders on high alert. The combination of technical strength, sector outperformance, and a bullish pattern near significant resistance has created a potential high-probability scenario that could lead to a substantial move if the breakout materializes.

Valuation: A Lofty Price Tag Ahead of Earnings

From a fundamental standpoint, CrowdStrike continues to be one of the strongest growth stories in cybersecurity. But with excellent performance comes great valuation. The stock trades at a sky-high 867x earnings, and a forward P/E of 95, a rich multiple even for a fast-growing tech company.

CrowdStrike is expected to report its subsequent earnings on June 3, after the market closes. In its previous report, the company posted EPS of $1.04, beating consensus estimates of $0.97, and revenue jumped 31.7% year-over-year to $963.87 million, beating forecasts.

Given the premium valuation, some long-term investors may prefer to wait until after earnings, especially if they’re hoping for a pullback or a valuation reset.

But for momentum-focused traders and swing traders, the chart and trend strength may be more persuasive than the high multiple.

Institutions and Analysts Still Betting Big

Despite its lofty valuation, institutional investors have been buying into CRWD heavily. Over the past 12 months, $12.4 billion in institutional inflows have poured into the stock, versus $6.7 billion in outflows, resulting in a net inflow of $5.7 billion. In Q1 alone, institutions bought $4.1 billion worth of CRWD shares while selling only $1.1 billion, a decisive vote of confidence.

Currently, 71.16% of the company’s shares are held by institutions, and that number continues to climb. The smart money is betting on CRWD’s long-term potential despite near-term valuation concerns.

On the analyst front, the sentiment is cautiously optimistic. Based on 45 analyst ratings, CRWD has a Moderate Buy consensus. However, the average price target is $403.56, suggesting an 8.75% downside from current levels. This implies that analysts see the stock as potentially overextended in the short term, even if they remain bullish over the long run.

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