$CRM Salesforce, What now? Where is it going? Investors didn’t like the idea of $CRM buying Twitter and the stock dropped due to this supposedly.
Let’s examine the charts and see what is really going on instead of listening to news and getting caught up in rumors.
Below is the Monthly chart provided by ThinkorSwim from TDAmeritrade. Price has been in a nice since 2010 with some pull back along the way. Since the big trend, $CRM really has not experienced a major pull back on a weekly basis. If it did, it would have gotten to the cloud!
Right, price is consolidating between 67.73 and 75.58. Some traders view the chart pattern to be a “head and shoulder” pattern with the next line at the support of 67.73 The resistance at 75.58 represents the top of the two “shoulders”.
The chart below shows the Elliott wave and Ichimoku chart provided by eSignal. Elliott Wave traders are patiently waiting for a Wave 4 pull back. Depending on where you draw the EW Counts, the EW4 could be at 65.00, 54.00 or lower. The EW4 should be a major pull back so price should get to at least 54.00 to be count as a major pull back. The 54.00 will be the Ichimoku cloud.
The major question now is if we are going to break the support to start a major pull back. Earnings is November 16 which is not too far away. Let’s examine the weekly time frame to see if we can get any “clues”.
Below is the weekly chart. It shows price consolidating with the same Support/Resistance as the weekly time frame. Until one of them is broken, there is no real probabilities to either side. Aggressive traders will continue to look for bullish trades when price is at 67.73 since the monthly time frame is still in a bullish trend.
Below is the daily time frame. The daily time frame is in a bearish trend but is going through a major bullish pull back. As long as the support at 71.31 holds, there is high probability for price to reach the Ichimoku cloud. The interesting part is that the support at 71.31 is an iMTF™ i.e. major support for all the day traders, swing traders, and long term traders.
In conclusion, the short term view is bullish to get to the higher time frame resistance of 75.58. The only way this can change is if the iMTF™ support at 71.31 is broken.
Remember, we are here to trade probabilities, not gamble. Our rules in our trading plan dictate the probabilities.
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