Is Salesforce.com about to embark on a ‘catch op’ move? Major players in the sector, all top five in size, have been moving well this summer. MSFT, ADBE, ORCL and INTU are all trading at new all time highs while shares of CRM have been noticeably lagging.
Back on June 4th CRM left behind a powerful spike low following its Q1 earnings report: https://www.marketwatch.com/story/salesforce-stock-ticks-higher-after-hours-on-earnings-beat-full-year-outlook-2019-06-04 . The stock continued to rally sharply over the next three sessions before the Tableau announcement https://www.marketwatch.com/story/tableau-deal-is-salesforces-biggest-ever-2019-06-10 sparked a high volume sell off. CRM has been consolidating in a narrow range since while the 200 day moving average held multiple weekly lows.
We believe CRM is setting up for a fresh rally leg. The stock is bumping up against heavy trendline resistance(links April/June highs) just below $159.00. Just above is another key hurdle, the ugly downside gap left behind the morning of June 10th($159.50). Once this zone is taken out CRM has room to run.
CRM has solid support in place between $158.00 and $155.00. On the downside a close back below $152.00 would violate this week’s low sending a clear warning sign that the post Tableau malaise will continue. We consider the stock a low risk buy near current levels.
At time of publication we do not have a position in CRM.