Sturdy CRM Stock Looks Poised for More Upside

by Serge Berger | February 5, 2014 1:17 pm (CRM[1]), the maker of on-demand customer relationship management software, has once again popped up on my radar given the relative strength it has displayed in recent weeks. Today the stock received an upgrade to a “Buy” rating from Roth Capital, and a price target of $80.

The cult stock and trend-follower favorite had another good year in 2013, but the upswing has definitely steepened the slope of the chart. Is CRM still a good buy after all its recent gains?

Through the lens of the below weekly chart looking back to 2009, CRM stock continues to act well as it works higher in a technically orderly manner. In September of last year the stock pushed past a multiyear resistance line (upper black line), which it retested in December, before shooting to a higher high in January.

crm weekly
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Salesforce has not yet announced its earnings, which may be playing a part in the relative outperformance.  Also, CRM stock is currently trading well above its 200-day simple moving average (red) — that doesn’t mean the stock can’t rise further, it simply means that the pace of price advance of the stock can’t continue at the 2013 pace for much longer.

I am pointing this out to see both sides and for risk-management purposes.  Most recently CRM stock has found resistance near $61.20 – $61.50. If the stock eclipses that level, the $64 – $66 area is within sight for the near future.

I am not ragingly bullish on the stock, but I am impressed by the relative strength that CRM stock continues to show amid the current broad market selloff — these are the types of stocks that typically will act well on oversold bounces in the broader market.

crm daily
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