Salesforce May Face DistributionSalesforce has limped as other tech stocks hit new highs, and some traders may think it’s going into distribution.
The first pattern on today’s chart is the bearish price gap on May 29 despite better-than-expected quarterly results. That may reflect waning enthusiasm about the software company’s fundamentals.
Second is the pre-earnings closing price of $276.03. CRM has remained trapped below that level, which may suggest it’s become resistance.
Third is the June 13 low of $258. The stock bounced there in mid-July but may now be at risk of breaking it.
Next, Bollinger Bandwidth has narrowed as the stock formed a tight range between the two levels. Could price movement expand following that period of compression?
Last, the 50-day simple moving average (SMA) had a “death cross” below the 200-day SMA in April. The 8-day exponential moving average (EMA) is also below the 21-day EMA. Those patterns may be consistent with bearishness in the long and short terms.
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