4 Trade Ideas for Salesforce: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Salesforce.com, $CRM, broke out of a long flat consolidation in January and ran to a top in February. From there it pulled back fast with the market to a bottom in mid-March. It bounced then, reaching to the 20 day SMA, just below the 200 day SMA. After falling back to a higher low it is now back at resistance, over the 20 day SMA.

The Bollinger Bands® are starting to open for a move higher. The RSI is making a higher high as it approaches the bullish zone with the MACD rising towards zero. There is resistance at 155.50 and 161.25 then 166.50 and 172.50 before 178.25 then a run to the top. Support lower comes at 143.50 and 138.50 before 134 and 124. Short interest is low at 1.6%. The stock does not pay a dividend. The company is expected to report next on June 2nd.

The April opens chain has highest open interest at the 140 put and the 165 call, with a large amount at the 150 put. The May chain builds from 110 to a peak at 150 then tails to 190 on the put side, but is very large and focused at 155 on the call side. The June options build to a peak at 135 on the put side and are biggest at 150 and then 185 on the call side.

Salesforce.com, Ticker: $CRM

Trade Idea 1: Buy the stock on a move over 155.50 with a stop at 150.

Trade Idea 2: Buy the stock on a move over 155.50 and add a May 150/135 Put Spread ($4.50) while selling the June 175 Calls (2.60).

Trade Idea 3: Buy the May/June 160 Call Calendar ($4.00) and sell the May 135 Puts ($2.85).

Trade Idea 4: Buy the June 135/160/180 Call Spread Risk Reversal for $3.40.

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into Easter and April options expiration week, sees equity markets are showing strong moves higher.

Elsewhere look for Gold to continue its thrust higher while Crude Oil moves lower in broad consolidation. The US Dollar Index continues to move lower short term while US Treasuries pullback in their uptrend. The Shanghai Composite looks to continue in broad consolidation while Emerging Markets move higher.

The Volatility Index looks to remain high but moving lower making the path easier for equity markets to the upside. Their charts look strong, especially on the shorter timeframe. On the longer timeframe the IWM, QQQ and SPY could be starting reversal moves but it is early to call. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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