Salesforce Rebounded To Its 200-Day Simple Moving Average And Has A Positive Weekly Chart

Salesforce (CRM) traded as high as $311.75 back on November 9, 2021, and then declined by 59.47% to as low as $126.34 on December 22, 2022. The cloud-based customer relationship software company has been below a death cross formation since January 28, 2022. The stock traded as high as $161.59 this morning versus its 200-week simple moving average, or ‘reversion to the mean’ at $161.35.

Salesforce focuses on artificial intelligence software on cloud, mobile, and social platforms. The stock is not cheap. Its p/e ratio is elevated at 79.61% and it does not offer a dividend, according to Macrotrends.

The company has beaten earnings-per-share estimates in twenty-three consecutive quarters.

The Daily Chart for Salesforce

The two-year daily chart for Salesforce shows the huge downtrend from $311.75 on November 9, 2021, to the low of $126.34 set on December 22, 2022. The rebound to the 200-day simple moving average at $161.35 was a bull market gain of 27.7%.

The horizontal line at $134.57 on the chart is the monthly pivot for January. This level held as the year began and the rebound tested its 200-day simple moving average in green at $161.35 today.

Note the death cross that occurred on January 28, 2022. This tracked the downside to the December 22 low. If there is a price gap above the 200-day SMA, the first upside is too the quarterly risky level at $170.33 which is the second from the bottom horizontal line. A death cross occurs when the 50-day simple moving average in blue moves below the 200-day SMA in green.

The higher two horizontal lines are the semiannual and annual risky levels at $215.46 and $227.48, respectively.

The Weekly Chart for Salesforce

The weekly chart for Salesforce has been positive since the week of January 13. The stock is above its five-week modified moving average at $146.85 but is below its 200-week simple moving average or “reversion to the mean” at $196.6. The 12x3x3 weekly slow stochastic reading is rising at 45.76 on a scale of 00.00 to 100.00. A reading above 80.00 is overbought and a reading below 20.00 is oversold.

Trading Strategy: Buy Salesforce on weakness to its five-week modified moving average at $147.04. Reduce holdings on strength to its 200-week simple moving average at $196.67.