CRM dominated by bears dragging the market lower throughout the day
Salesforce.com Inc (CRM) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CRM ended Wednesday at 250.60 losing $1.08 (-0.43%), but still slightly outperforming the S&P 500 (-0.46%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CRM as at Sep 16, 2020):
Wednesday's trading range has been $5.20 (2.04%), that's below the last trading month's daily average range of $10.76. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for CRM. Prices continued to consolidate within a tight trading range between 244.04 and 255.43 where it has been caught now for the last three trading days.
Even with a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on July 28th, CRM actually gained 2.17% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
While the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 256.51 where further buy stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Salesforce. com. Out of 66 times, CRM closed higher 66.67% 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 62.12% with an average market move of 2.91%.