… to the last I grapple with thee; from hell’s heart I stab at thee; for hate’s sake I spit my last breath at thee.
For many captains greater than I, the demise of Salesforce.com has proven to be a monomaniacal pursuit of sorts. It has steamrolled bear after bear in its ascent higher. Even by the dot com era’s standards, this whale has gotten out of hand. Surely, you are already familiar with the myriad of rationales as to why this stock should be GMCR’ing lower, so I’ll refrain from rehashing the litany of eroded fundamentals. This stock is the poster child for axioms like, “Markets can stay rational longer than you can stay solvent.” So why bother going after this great white whale?
For one, I am forecasting extreme market weakness in the near to medium term. The recent, epic descents of some high-flying stocks–NFLX, OPEN, and GMCR, to name a few–have proven that, in times of serious market contraction, investors are simply not willing to pay for high-priced growth. As volatility has reigned supreme, the margin for error on earnings has proven to be razor thin.
The aforementioned market realities, coupled with what appears to be a very favorable technical set up, make this high time to get short CRM. Importantly, please note that I have very minimal technical expertise. I am very much inclined to side with Fly’s sentiments on technical analysis. Then again, I see some of the great work chessnwine/ragin put out, and I’m finding myself using it more and more to buttress my trading ideas. Nevertheless, behold:
If we use the 200-day as our key reference point, it appears that what was formerly support has now become a level of resistance. Getting short CRM is hardly a contrarian trade–you might even argue that it’s somewhat of a crowded trade. And with earnings on tap this week, it’s possible this thing reasserts itself higher. As such, I’m prepared to limit my upside exposure vis a vis a stop at $137, firmly above the 200-day. Let’s see if this ends with a better result for me than it did for Captain Ahab.
Update: Well, that’s great to see–wake up to a pre-market explosion higher thanks to the fuckshows over at Citi. That’s multiple upgrades this thing has received in the last week. Hmm… Moved my stop up to $142.