Salesforce.com - (CRM) - April 26, 2024
SIA Charts’ relative strength rankings help investors manage risk by identifying stocks and sectors which are underperforming relative to their peers and/or their benchmarks and should potentially be avoided. Staying away from stocks that are not attracting capital can help investors to avoid areas at higher risk of absolute declines and relative underperformance.
In recent issues of the Daily Stock Report, we have been highlighting how capital has been rotating into manufacturers, energy producers and mining companies. On the other hand, capital has started to flow out of the technology sector, with investors taking profits in several names this season following big bull runs that started back in November.
Salesforce.com, for example, dropped out of the green zone of the SIA S&P 100 Index Report down into the Yellow Neutral Zone, after falling 3 spots yesterday and 19 spots in the last month to 27th place. During the time it was in the green zone, which started in November, CRM returned 18.5% compared with a gain of 10.7% for the S&P 100 Index over the same period.
Salesforce.com (CRM) shares have rolled over into a downtrend in a major way this month. Distribution started back in March as a series of lower highs emerged indicating increased selling pressure. This was confirmed decisively two weeks ago when CRM fell below its 10-week moving average, then staged a breakaway gap down through $292.00 on a jump in volume to complete a bearish Descending Triangle pattern and signal the start of a new downtrend.
Currently the shares are testing measured support in the $266.00 to $270.00 range. Should that fail, next potential support may emerge near the $250.00 round number or longer-term uptrend support closer to $240.00. Initial resistance on a bounce appears in the $292.00 to $295.00 area between the recent breakdown point, the top of the gap, and the 10-week average.
Over the course of 2023 and the start to this year, Salesforce.com (CRM) staged a major advance through three big rallies and generally remained under accumulation in-between. This now appears to be over with the shares turning decisively downward. Since the beginning of March, CRM has been retreating, first falling back under $300.00, then completing a bearish Double Bottom pattern and extending declines into a bearish Low Pole, confirming that the shares have come under distribution. Initial downside support appears near $256.45 based on a horizontal count, followed by previous column lows and highs near $246.45 and then $232.15. Initial resistance appears near $283.30 based on a 3-box reversal. With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 5 out of 10, CRM is exhibiting short-term weakness against the asset classes.
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