I have a couple of setups to look at this week before some earnings due at the end of August.
The first is Box Inc. (BOX) . Box is something I used every day in my work and I spy a nice two-step pattern buy. Actually I have two zones to consider in this name.
The first one we are currently testing and holding above and it comes in at the $22.82-$23.49 area. I also like the fact that a test of this support was also kissing the 200 simple moving average which also tends to act as support.
The second zone I would consider for a buy entry just comes in a bit below the first at the $21.77-$22.21 area. Note that both of these Fibonacci price cluster zones include the coincidence of at least 3 Fibonacci price relationships. This suggests that the zones will tend to be more important than single Fibonacci price relationships.
I will take my buy signals in this name as long as price holds above one of the two zones. My initial upside target if it does play out as a two-step pattern is the $31.54 area. There are also a couple of hurdles noted on the chart before those targets. I typically suggest to my traders that they at least move to a breakeven stop if that initial resistance is tested. Also note that there were some timing factors present at the most recent low. That also supports a bullish scenario at the moment. I will consider myself wrong this setup, if both of the support clusters are violated.
Next let's take a look at Salesforce.com (CRM) .
CRM has a nice general pattern of higher highs and higher lows and recently has made a low at a Fibonacci price cluster. It is true that you have the least amount of risk on one of these types of trading setups when you enter closer to the original setup zone. Even though we may be late to the party in this case as we have already started to rally off the $134-$135 support area, the party is not anywhere near over since the initial upside target for this setup comes in at the $153 handle.
In the case of CRM, I would look at a pullback to the recent low for a secondary entry, keeping in mind the $153 target. Bottom line, as long as we continue to hold above the recent low made at $135.39 made on July 31, I looking to set up some pullback entries for an eventual target at the $153 area. If the July 31 swing low is violated instead, I will consider this setup a bust.
