Friday ended on a high note for stocks and the buying has continued at last chcck Monday. On both days the buying has been pronounced in tech, and in select names, like Salesforce (CRM), we’re seeing even more follow-through.
Shares of the software stalwart climbed 3.3% on Friday and were up more than 4% at last check.
Today’s rally is being fueled by the activist investor Elliott Management, which took a stake in the firm. Elliott joins Starboard Value, which took a stake in the second half of 2022.
It’s not clear whether Elliott will seek a board seat, although it clearly sees value in the tech giant after the stock suffered a peak-to-trough decline of 59.5% and last month hit a 52-week low. Since then, Salesforce stock has moved up about 25%.
Let's take another look at the stock, which is working on a sixth straight weekly gain.
Trading Salesforce Stock
Chart courtesy of TrendSpider.com
On several levels, today’s rally is noteworthy. First, the shares are gapping over and clearing the $150 area. That has been resistance for several weeks.
Second, the shares are clearing a downtrend resistance measure (blue line), although that’s a bit of an arbitrary observation. If we connect the dots — or in this case, connect the highs — downtrend resistance comes into play near $160.
That’s also where the 200-day moving average comes into play. Combined, this area could act as a magnet for Salesforce stock. Just above this zone is a level of resistance near $165.
Therefore, on the upside, the $160 to $165 zone is a big level for the stock to clear. Above $168 and $180 is in play, followed by stiff resistance in the $190s.
On the downside, $150 is the first key level for Salesforce stock to hold.
Below that and the $140 area is in play. This level has been a pivotal support/resistance area since October. Further, the 50-day and 21-day moving averages are near this zone.
If $140 gives out, it could open the door back down to the $127 to $130 zone. That would be followed by the huge support area we outlined earlier this month.
