Anthropic Attacks Again
When Fear Hits Quality Names, Opportunity Follows
SPY managed to finish last week in positive territory after holding the 100-day SMA and bouncing on Friday. It remains stuck in no man’s land, chopping sideways as long as price stays between the high of the February 12 large bearish candle and the 100-day SMA.
On the prior large bearish candle at the 100-day SMA back on November 20, there was clear risk reward to the upside once price reclaimed that candle’s high. When we closed above it, that was a strong signal the market was ready to push higher. This time is different. The high of the recent large bearish candle sits essentially at all-time highs, which makes the risk reward more difficult. Considering we have rejected from that level for over a month, it would not be surprising to see that happen again.
As I mentioned early last week, when we are in choppy sideways price action, the highest probability trade is often buying near the bottom of the range at support and selling into the top of the range. So far, that approach is working. QQQ and SPY are bouncing, and the 100-day SMA on SPY held. If we continue moving higher this week, we should soon be testing the upper end of the recent range and possibly confirming the dot-com analog bars if we get a breakout.
On the other hand, if we continue to chop inside this range, which could persist for quite some time, we need to look for trades that are differentiating from the broader market and offering clean, high probability setups with defined edge.
SPY Daily Chart
Anthropic may be creating additional opportunities for us to watch. In early February, investors panicked over an update related to its Claude coworking tool. Software names sold off aggressively, in many cases extending prior weakness, and much of the SaaS space was hit hard. I have already discussed opportunities I am watching within that group, including Palantir Technologies (PLTR), Microsoft (MSFT), and ServiceNow (NOW).
On Friday, another wave of fear hit the market tied to Anthropic’s new Claude Code Security feature within its AI platform. Stocks such as CrowdStrike (CRWD), Cloudflare (NET), Palo Alto Networks (PANW), SailPoint (SAIL), Rubrik (RBRK), and Zscaler (ZS) were hit hard, with the Global X Cybersecurity ETF (HACK) falling roughly 3% on the news.
Just like the earlier software selloff, many of these stocks appear to have been sold indiscriminately, without much differentiation between those that may actually be pressured by AI advancements and those that could benefit in an increasingly AI-driven security landscape. CrowdStrike (CRWD), Cloudflare (NET), and Palo Alto Networks (PANW) appear to be positioned well longer term, and their charts are beginning to look constructive from a technical perspective.
Let’s walk through them individually for this week.
CrowdStrike (CRWD)
CRWD reports earnings on Tuesday, March 3, just over a week from now. Because of that, initiating a short term trade here becomes more difficult. The recent short term setup already played out. It was one I discussed in the RLT Swing Trade Room when price filled the gap at $374 and reclaimed the 100-week SMA the following session. That move delivered roughly a 16% pop before the Anthropic headlines pushed the stock back below the 100-week SMA.
Now that CRWD has lost the 100-week SMA and the anchored VWAP from the August 2024 low, it is worth stepping back and reassessing the bigger picture.
Zooming out, I believe CRWD may be tracing out a large expanded flat fourth wave that has been developing since July 2025. If that count is correct, we are likely closer to the end of the fourth wave than the beginning. Ideally, a fourth wave of this nature would find support near the 100-week SMA and the $365 area, both of which have already been tested.
If price breaks decisively below $330, that would suggest a different structure is unfolding. In that scenario, a move back toward the prior all-time high near $297 or even the 200-week SMA around $284 becomes more likely.
If CRWD can stabilize in the $390 to $350 range and then begin to push higher in a clean five wave advance, the longer term target would sit near the $600 level. That type of move would take time and would need to navigate multiple earnings reports and macro headlines along the way.
Earnings will be pivotal. A large gap down that leaves price firmly below the 100-week SMA would make me cautious for a while. On the other hand, a bullish reaction or even a muted response followed by vertical price expansion would be a constructive signal and could confirm that the larger corrective structure is done or nearing completion.
CRWD Daily Chart
Cloudflare (NET)
NET appears to be tracing out a pattern similar to CRWD, just not as mature within the structure. It recently pushed above its 2021 all-time high, but that breakout quickly turned into an all-time high trap. That is a warning sign and opens the door to further weakness. When CRWD previously broke to new highs and failed, it ultimately dropped nearly 50% before regaining its footing and launching into a powerful advance.
I think the NET chart is best viewed on a log scale because of the clean parallel channel that has been in place since mid-2022. That channel likely represents some form of first wave leading diagonal for a larger third wave advance. The key question now is whether the third wave already began in 2025 and will soon break out to much higher levels, or whether we are still due for a deeper second wave retracement.
The answer will depend on which support levels hold. If NET can maintain the 100-week SMA, the lower trendline of the channel, and the gap fill at $126.20, that would leave open a relatively swift path to new highs. If, on the other hand, those levels fail, I would assume we are in a longer, deeper, and more drawn out second wave. That scenario would likely present a buying opportunity, but probably closer to the $100 to $80 range.
There is also the possibility that neither support is meaningfully tested and the stock simply pushes higher from here, forcing dip buyers to either chase strength or participate on breakouts. Given the current look of the chart and the broader market backdrop, I will remain patient for now.
NET Daily Chart
Palo Alto Networks (PANW)
PANW, much like CRWD, appears to be working through a larger degree fourth wave. The past two years may have formed a large ending diagonal that has already retraced very close to the origin of that pattern in a relatively short period of time. That type of swift retracement is typical behavior following an ending diagonal, which increases the probability that interpretation is correct.
If that is the case, the next move higher would likely be a B wave advance that carries PANW into the 170 to 190 range. I am seeing a number of potential B wave structures across the broader market right now. From a risk management standpoint, buying near the end of A waves can make sense. If a C wave lower never materializes, you are positioned early for upside. If a C wave does unfold, the B wave bounce provides an opportunity to take profits and hedge ahead of another potential leg down.
PANW has meaningful support just below current levels, where the A wave could conclude near the 200-week SMA and a key horizontal support zone. If price breaks below the 200-week SMA and fails to reclaim it quickly, caution is warranted. The ideal trade setup would be to see PANW hold the 200-week SMA, rally in a B wave toward the $177 area, take partial profits and hedge, and then look for a potential C wave decline toward the $120 region to complete the larger degree fourth wave.
This framework opens the door to multiple trades and accommodates different trading styles, while clearly defining the key levels that matter for any long exposure.
And if you are still unsure whether Anthropic is about to put these companies out of business tomorrow, I will remind you that famed and esteemed trader of our day, Nancy Pelosi, holds positions in both CrowdStrike (CRWD) and Palo Alto Networks (PANW), so at least the bulls have that going for them.
PANW Daily Chart
