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Actionable news in CRM: SALESFORCE.COM Inc,

How to Trade Salesforce.com on Momentum

Salesforce.com (CRM) had been a strong momentum stock since moving above its 200-week simple moving average during the week of Aug. 14, 2009. Then, after trading as high as $82.90 in November 2015, the stock crashed by 36.6% to as low as $52.60 in February.

Shares of Salesforce had been above a "golden cross" on its daily chart since Oct. 1, 2014, when the stock closed at $56.73. During the November to February crash, the "golden cross" ended on Feb. 12, just after the stock bottomed. This shows that following a "golden cross" from beginning to end does not always work.

A "golden cross" occurs when the 50-day simple moving average crosses above its 200-day simple moving average, suggesting that higher prices lie ahead. This signal from $56.73 was in play at the Nov. 19 high of $82.90. A year ago, on Aug. 20, 2015, I showed key levels at which to sell on strength at $76.52 and $82.97; the base of this price zone was tested on Oct. 13.

Today's daily chart focuses on the Fibonacci retracements of the rebound from the February low to the May high.

The weekly chart for Salesforce.com ended last week negative, but at the beginning of the year investors had the opportunity to buy...


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