Salesforce, Inc. (CRM) , the cloud-based software company, is due to report their latest quarterly figures after the close of trading Tuesday. In our last review of CRM on March 2 we wrote that, "CRM could see a rebound rally back up into the $240-$255 area, but without a new base formation in place I do not expect the rally to be sustained. Nimble traders could play the bounce if they desire, but investors should remain patient."
Let's check on things again.
In the daily bar chart of CRM, below, we can see that the shares have begun to stabilize in recent weeks. CRM is still trading below the declining 50-day moving average line as well as the bearish 200-day line.
The trading volume has been steady since the middle of April but the On-Balance-Volume (OBV) is showing some improvement and a tilt towards more aggressive buying. The Moving Average Convergence Divergence (MACD) has crossed to the upside for a cover shorts buy signal.
In the weekly Japanese candlestick chart of CRM, below, we can see lower shadows on the three most recent candles telling us that traders have been rejecting the lows. The 40-week moving average line has a negative slope.
The weekly OBV line has been pointed down since November. The MACD oscillator has been narrowing and is closer to a cover shorts buy signal.
In this daily Point and Figure chart of CRM, below, we can see an upside price target in the $185 area.
In this weekly Point and Figure chart of CRM, below, we can see a downside price target in the $89 area. On the other hand, a trade at $170.07 or higher should start to improve the outlook.
Bottom-line strategy: I have no special knowledge of what CRM will report to shareholders but aggressive traders could probe the long side of CRM ahead of earnings. Risk to $150 and add to longs above $171. A rally back to the $185-$200 area is possible in the next few weeks.
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