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Trends & Analysis
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News

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News

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News

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EUR/USD plunges after parliament elections

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Is a big move coming for AMD?

Asset Watch

Did the bulls save Salesforce?

Tuesday June 4, 2024

With poor earnings guidance igniting a selling spree on 30 May, Salesforce suffered one of its largest daily drops in over 20 years. Management projected Q2 earnings per share (EPS) in the range of $1.31 to $1.33, and revenue between $9.20 billion and $9.25 billion. Wall Street had expected $1.47 and $9.34 billion.
On 30 May, Wedbush analyst Dan Ives said, “We would be buyers on weakness this morning, as seeing the forest through the trees, this is a turnaround in motion for a premier tech stalwart with a massive installed base led by one of the best CEOs in the global tech landscape in our view.”
But because the fundamental bulls still back the customer relationship giant, enthusiasm also showed up in the technicals.
Salesforce rallied and closed above its 200-week moving average (near $221) on 31 May, which means the long-term uptrend is intact. The stock also ended the week above its July 2023 closing highs (near $230). Though the stock closed below trendline support (the upward-sloping white line on the right side of the chart), the 200-week MA and the July 2023 closing highs should be given precedence for now.

If both levels hold, the 30 May overreaction could soon be forgotten, and a prudent plan would be to remain long when the stock trades above the 200-week MA, and exit the position when breakdowns occur.

And if that happens, next-level price support is in the $196 area, which is near the February 2020 highs, the February 2022 lows, the August 2022 highs, and the October 2023 lows.

So, did the nearly 8% surge on May 31 do enough to rebuild investors’ confidence, or will the Salesforce selling resume in the days ahead?


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