CRM Technicals Intact - Market Analysis for Jun 1st, 2023

Despite a solid, strong earnings report CRM is down $13-$14, or 6%. I suspect after the explosive up moves in NVDA, MRVL, and AVGO, investors were satiated by acute share appreciation in the earlier reporting AI names by the time CRM earnings were released after last eve's close. But has the adverse reaction of investors to CRM results wrecked its technical outlook?  Hardly (See chart.)

ES continues to levitate at a relatively high level above 4170 and less than 2% beneath its recent attempts to challenge 4240. My attached Hourly Chart shows the juxtaposition between the current price at 4197 with the up-sloping 20 and 50 DMAs, now at 4171 and 4143. As long as any sudden bout weakness (doubts about Senate passage of the debt ceiling bill) is contained above the up-sloping 50 DMA (4143) as a worst-case pullback support plateau, my near-term pattern work remains biased to the upside for one more upside run to a minimum target zone of 4250/60.

As for the technical setup in CRM in the aftermath of the negative reaction to an otherwise impressive earnings report, my 4-Hour Chart shows that CRM's 12-month base-accumulation period and pattern remain intact and still the dominant technical feature governing stock direction. The negative reaction to earnings that reversed CRM's initial knee-jerk up-spike to a new 15-month high at 231.50 into a nosedive to a low of 207.50 (yesterday's close was 223.38) has the right look of a sell-the-news response that effectively has returned the price structure toward a retest of its multimonth upside breakout plateau... 

It is classic technical behavior for a pattern that is breaking out of a huge base formation to retest the breakout zone after an initial thrust prior to launching into a sustained climb to realize the potential implied by the larger base pattern. As long as any additional weakness is contained within or above the 190-200 "buffer zone," fans of CRM should be looking to enter or to add positions into forthcoming weakness. Only a close under 190 weakens the larger bottoming pattern while a break of 185.80 wrecks it altogether.

Barring weakness that slices under 200 toward 185.80, CRM points to intermediate-term targets of 240 and 275.

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