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This week, we saw a significant drop in the price of Salesforce.com (CRM) following its earnings report. As a result, the stock fell below its 200-day moving average for the first time since October 2023. But what does the future hold for CRM? Our in-depth analysis suggests that there may be further downside before a potential buying opportunity emerges.
Before the earnings report, Salesforce had been trading in a choppy, sideways range, showing signs of a downtrend with declining momentum characteristics. The sudden drop post-earnings created a new anchor price around $222, which is a 50% retracement of the previous bull phase. This level now serves as a critical point of reference, with any further closes below indicating continued weakness.
Looking ahead, we anticipate a potential downside target of $200, which aligns with previous lows and Fibonacci levels. However, we also emphasize the importance of monitoring for signs of accumulation and a potential shift in the current downtrend pattern. Until we see a higher low indicating an influx of buying power, the chart suggests further deterioration may be on the horizon.
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