CRM breaks back below 200-day moving average
Salesforce.com Inc (CRM) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
CRM ended the week -4.77% lower at 135.95 after losing $6.11 (-4.3%) today, significantly underperforming the S&P 500 (-2.33%) following today's NFP report. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CRM as at Dec 07, 2018):
Friday's trading range has been $7.63 (5.38%), that's above the last trading month's daily average range of $5.98. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for CRM.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on Tuesday, CRM actually gained 2.03% on the following trading day.
Prices are trading close to the key technical support level at 133.47 (S1). Salesforce. com closed back below the 200-day moving average at 136.08 for the first time since November 27th. After having been unable to move above 142.06 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 142.37.
While the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the nearby swing low at 132.75 where further sell stops might get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Salesforce. com. Out of 401 times, CRM closed higher 57.61% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 63.09% with an average market move of 1.96%.