Salesforce earnings are sparking a breakout. Where the stock is going, according to the charts
"Watch the gap," says the chief market strategist at Freedom Capital Markets.
TL;DR
- Salesforce stock experienced a large price gap higher after its earnings report, similar to previous reversals in Microsoft and Palantir.
- The stock broke above key resistance at the $208/$210 level and its longer-term downtrend, moving above its 200-day moving average.
- Weekly charts show a break above the 50-week moving average, with sights set on the $240 area and 200-week moving average.
- A close above $238 could lead to a run towards $260, with the $230 level now acting as support.
- Long-term analysis shows the trendline held, and monthly momentum indicators (stochastic and MACD) have triggered buy signals, historically preceding multi-year uptrends.
- Short-term traders are advised to buy with stops below the $230 opening gap.
- Long-term investors can see this as a positive trend change with an upside target of $260 in the next quarter.
- Concerns about AI disrupting Salesforce's growth may be overblown, with potential for AI to aid its future.