In his first Executive Decision segment of "Mad Money" Tuesday, host Jim Cramer spoke with Marc Benioff, chairman and CEO of Salesforce.com (CRM) , to learn more about his company's planned purchase of Slack Technologies (WORK) .
Benioff said the Slack acquisition "changes everything." Companies are changing how they work and are rapidly adapting to their employees working from anywhere, Benioff noted, and by integrating Slack more closely with Salesforce connecting with customers and employees will become even easier.
Let's check out the charts of Salesforce, which is a holding of Cramer's Action Alerts PLUS charitable trust.
In this daily bar chart of CRM, below, we can see that prices have struggled to restart their uptrend after gapping higher in late August. Prices have traded sideways to lower the past three months. Prices are trading below the flat 50-day moving average line but above the rising 200-day moving average line. The trading volume has been relatively light since late August, but we can see an increase in turnover recently as prices worked lower in late November.
The On-Balance-Volume (OBV) line has moved sideways to lower since late August, telling us that sellers of CRM have been a bit more aggressive than buyers. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line recently, which tells us this stock displays hardly any trend strength.
In this weekly bar chart of CRM, below, we see a mixed picture. Prices are still in a longer-term uptrend above the rising 40-week moving average line, but the weekly OBV line shows weakness the past three months or so and the MACD oscillator is in a take profits sell mode. This does not look like it can support a fresh rally just yet.
In this daily Point and Figure chart of CRM, below, we can see that the software is projecting a potential downside price target in the $204 area.
Bottom line strategy: The purchase of Slack may be a good strategic move for CRM, but in the near term the stock price looks vulnerable to a decline. Stand aside from the long side as we could see a decline into the $210-$195 area in the weeks ahead. This potential decline may turn out to be a buying opportunity.