In his second "Executive Decision" segment of Mad Money Tuesday night, Jim Cramer checked in with Marc Benioff, chairman and CEO of Salesforce.com (CRM) , which just reported another solid quarter.
Benioff said Salesforce is exceeding expectations and its guidance for the rest of the year is amazing. Benioff noted some of Salesforce's biggest deals, which included Volkswagen AG (VLKAF) , 3M (MMM) and Goldman Sachs (GS) .
Let's check the charts of this Action Alerts PLUS holding.
In the daily bar chart of CRM, below, we can see that prices have turned lower with the weakness in the broader market. Prices have declined toward the rising 50-day moving average line. Chart support begins around $165. The rising 200-day moving average line intersects way down around $160.
The trading volume has increased in recent days and the daily On-Balance-Volume (OBV) line has turned lower along with the Moving Average Convergence Divergence (MACD) oscillator moving closer to the zero line.
In the weekly bar chart of CRM, below, we can see how prices have made a top reversal. Prices are above the rising 40-week moving average line but a pullback and retest of the consolidation area beginning around $160 seems likely to me.
The weekly OBV line is showing some softness and thus an increase in aggressive selling. The MACD oscillator has just started to narrow so we can tell that the trend strength has begun to wane.
In this daily Point and Figure chart of CRM, below, we can see that the software is still projecting a potential upside price target of $197. However, we can also see that a trade at $176.97 will be a new low down on this chart and would weaken the picture.
Bottom-line strategy: CRM does not display a significant top formation or distribution (selling) but that does not mean it will escape spillover weakness from the broader market. Check your cost basis and act accordingly -- don't let a winner turn into a loser.
