After last weeks earnings surge, $CRM has held the move remarkably well. Enough to get my attention and see if it is ready for a trade. Like many traders, I start with the daily chart.
The first thing I noticed was the surge last week shifted the RSI range from a bear to bull with authority while CFG at the bottom moved well above 100. A CFG over 100 is a double edged sword. It shows strong momentum, but not the best place for new positions. price moved right back up to the highs made back in September…and April. So far the bulls haven’t been strong enough to get through. Jumping up to the weekly chart we can see the pattern here is a little larger than first thought.
Here I noticed during the correction the RSI never went below 40 holding its bull range here as well. The weekly pattern grows to at a minimum to a year long ascending triangle or a two year long inverse head and shoulders continuation pattern. Both patterns have measured moves to 225, but it could take a while to get there as the patterns are large. Either way it looks to be setting up for higher prices.. A quick jump to the monthly shows us if we do get the break, it would be Blue Sky Territory for this name.
If those targets seem to high to you, the more conservative PnF target of 202 still sports a sizable gain from here and is just about ready for its breakout.
Now for the ALMOST part. All of this evidence is lining up for a potential breakout soon, but after such a move the problem for traders is to not get shaken out while trying to take a position. For this I drop all the way back down to the 65min chart which tells us we need a little patience and let it set up again.
The RSI on this level has been hanging out at 80 since the big move, and now we see the CFG is rolling over with a divergence from above 100. I would like to see RSI get back near (preferably below) 60 and let the CFG get below 50. Once there I would start looking at the price action and levels for a good entry. It could break out without digesting the move, but I would be more skeptical about such a move and still wait for a consolidation for a good entry level. Either way $CRM will remain on my radar in the coming weeks; now maybe it will be on yours as well.
(All market data above are derived from Stockcharts.com, Esignal, and Reutersdatalink)