Cloud software giant Salesforce.com, Inc. (CRM), which has beaten earnings estimates for the 13th consecutive quarter, on the 28th of May. The stock traded as high as $184.80 the day and then dropped to $167 on June 5. Salesforce stock is trading between its annual pivot at $167.49, and its quarterly and monthly pivots at $181.82 and $182.72, respectively.
The stock closed Tuesday 9 June, to $174.56, up 7.3% year to date, and in the bull market territory at 51.4% above its March 18 low of $115.29. Salesforce stock is also in correction territory at 10.8% below its intraday high of $195.72 game Feb. 20. Salesforce is not cheap, with a P/E ratio of 214.67, and the company does not offer a dividend, according to the trends. This stock is not for value investors.
The daily chart for Salesforce
Refinitiv XENITH
The daily chart for Salesforce shows that the stock moved sideways around its 200-day simple moving average up to Dec. 20. While the stock regained momentum, which has led the stock to its record high of $195.72 game Feb. 20.
2020 has started, Salesforce stock moved above its semi-pivot at $163.17, and its annual pivot has been penetrated and Jan. 6. It was a second reason for the stock to go to his Feb. 20 of the top.
The stock then dropped to 41 per cent crash of its March 18 low of $115.29. Salesforce has fallen below 50 days simple moving average on Feb. 26, held its semiannual pivot at $163.17 on Feb. 28, and then failed to hold this level, the 6 March.
Failure to hold its 200-day simple moving average on March 11 led to the March 18 low of $115.29. On the rebound, the stock is returned to its 200-day simple moving average on the 17th of April. On 7 May, the stock has moved back above the semi-annual and annual pivots at $163.17 and $167.49, respectively. The trading range between $167.49/$163.17 and $181.82/$182.72 has been in the game since the 7th of May.
The weekly chart for Salesforce
Refinitiv XENITH
The weekly chart for Salesforce is positive, with above its five-week modified moving average at $171.00. The stock is well above its 200-week simple moving average, or the return to the average, to $125.90.
The 12 x 3 x 3 weekly slow stochastic reading should increase to 79.99 this week, from 76.33 on 5 June. During the week of Jan. 31, this reading has been above 90.00 in a tire parabolic bubble formation. Bubbles almost always pop, and it has jumped with the decline in the March 18 low.
Trading strategy: Buy Salesforce stock on the weakness of its annual and semiannual pivots at $167.49, and $163.17. Reduce the holdings of strength to quarterly and monthly pivots at $181.82 and $182.72.
How to use my value levels and risky levels: The share price closing price on Dec. 31, 2019, has been an entry to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.
The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of June has been established on the basis of the May 29 close. New weekly levels are calculated following the end of each week, while new quarterly levels occur at the end of each quarter. Half-yearly levels are updated at mid-year, the levels are set throughout the year.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: investopedia.com
