Is it time to buy SalesForce.com (CRM)? Not yet. (May 04, 2015) . . . even though I say April 4 in the video
I want to look at Salesforce ( NYSE:CRM ) today because that’s what you’re looking at here. The stock was in a pretty tight volatility squeeze; this was in one of the “Chart of the Day” videos last week talking about how we had an alert that caught this on the bounce. Some folks bought it then and then caught it again on the breakout on the same day. That was a really good trade .
If you haven’t tried “Stock Market Mentor” to see what these alerts will do for you. It’s not just the goofy price alerts like you can get on “Yahoo Finance” or any of your brokerage software, they’re links to my video specifically covering why I’m putting an alert there. But anyway, that was then, this is now. You can see the stock broke out; they don’t report earnings until May 20th, which is still a ways to go.
So the stock has a ways to go before earnings; the stock popped because of a rumor that Oracle ( NYSE:ORCL ) was going to buy Salesforce ( NYSE:CRM ), or might, because they raised a bunch of money. Nobody knew why Oracle ( NYSE:ORCL ) raised a bunch of money. I’ll tell you why they raised a bunch of money, because interest rates are really, really low so when you can get free money why not get a bunch of it?
So anyway, then the stock cooled off and now it’s drifting lower. So what are you going to do? If it’s me, and it is, I’m waiting for the stock to fall back to $69.00 or so. This is not, in my view, a good time to be buying this stock; I want to see it at a better technical place. It puts this in kind of a tough spot because you’ve got all of this buying here on this one day. The folks that bought on this part of the day are all losers. The folks that bought here are all nervous. So we want to see this stock get back through the nervous crowd closer to the 50-day moving average and then you can look to buy the stock.
But I’d say a lot of the pre-earnings enthusiasm has been rung out of this stock already, which in my view tells me that in another week or so, maybe towards the end of this week, if we get more of a pullback here, hopefully we will, we could see an earnings run start. This wasn’t the earnings run, we want to see more of a pullback and then look for an earnings run on this. So I think you’re being real quick on the trigger in buying the stock right now. If you own it and are asking whether you should sell it or not, it’s not a question I can answer for you, you’ve got to figure that out for yourself.
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