Monday saw a broad-based rally in U.S. equities, and although technology stocks as a group did not lead the pack, they participated nicely and continued higher along their strong 2017 bull trend. Shares of Salesforce.com, Inc. (NYSE:CRM) are having another great year of performance up more than 50% for the year and just recently completed a bullish reversal that could lead the stock toward a well-defined next upside target.
As a reminder, year-end dynamics for the U.S. stock market tend to be such that strongly performing stocks of the year (particularly the sexy go-to names) tend to hold up or rally into the last days of the year as underperforming fund managers have to chase these names higher for purposes of both performance and window dressing.
With only eight trading sessions left in the year and CRM stock up big in 2017, it does in my mind fit the bill as one of these stocks that fund managers will at least not sell down into year-end.
CRM Stock Charts
Moving averages legend: red – 200 week, blue – 100 week, yellow – 50 week
For some necessary perspective, let’s note that on the multiyear weekly chart CRM stock, thanks to a strong October and November rally, overshot its big-picture up-trend.
The weekly MACD oscillator at the bottom of the chart is registering all-time overbought readings in kind. From this angle and as a long-term buy entry point, this current juncture does not offer good reward to risk to yours truly.
Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 day
The picture on the daily chart, however, looks more reasonable, for a trade. Note that in early December CRM stock once again bounced off the lower end of its 2017 up-trend and the stock at the same time also held its yellow 50 day simple moving average on a daily closing basis.
Momentum on the daily chart also has come off its highs in recent weeks with the MACD in neutral territory.
Active investors and traders could now attempt a buy in CRM stock toward the $110 area as a next upside target (the very upper end of the 2017 channel as marked by the black parallels) and using a close below the $101 area as a last resort stop loss.
Check out Anthony Mirhaydari’s Daily Market Outlook for Dec. 19.
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