CRM: Pullback Buy Signal
Stock Option Assassin | Nov 25, 2015 12:43AM ET
Salesforce.com (N:CRM), ticker CRM, is giving one of my favorite short term buy signals today.
First, as you can see in the 4 hour chart below, CRM had a very positive earnings reaction last week. Since then there’s been a tight consolidate pullback into the $80 level, which was previous resistance for weeks. I love this setup because the major news event is over, earnings, and investors liked it. It’s now giving us a chance to get in on a long trade.
So on the indicators, CRM has pulled back to the 13 ema, the DMI Oscillator had a strong surge last week and is now near zero, and the DMI Stochastic Extreme is issuing a buy signal by moving up from an oversold position.
The rest of the market held up pretty well today despite a downed Russian plane and crappy Consumer Sentiment numbers. Given the short trading week due to Thanksgiving, the light volume is favoring the bulls over the next couple days.
So I picked up some CRM December Delta 70 calls and am looking for the stock to retest the recent earnings pop high of about $83 over the next few days. I would take profits and/or raise stops if that level is reached.
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