Salesforce.com Could Be Squeezing Toward a Breakout

Salesforce.com, like Amazon.com yesterday, has gone nowhere since spiking to new highs last summer. However now it’s showing signs of a breakout.

This chart includes the same custom Distance from MA script, showing that CRM traded 59 percent above its 200-day simple moving average (SMA) early last September. That last time it was that extended was 2006. However now it’s back to a much more typical reading below 10 percent.

Next, price action has been so quiet that Bollinger Band Width has slipped to its longer-term extreme around 5 percent. Also notice how the higher lows recently formed an ascending triangle that the cloud pioneer has escaped the last two sessions. These suggest price is ready to expand after compressing.

Additionally, the 50-day SMA is nearing a “Golden Cross” above the 200-day SMA.

Finally, consider the $250 level where CRM peaked in mid-February before knifing lower. Yesterday it challenged that area and registered its highest closing price since November 24. This suggests the market has come to accept the new price range.

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