Salesforce Shares Jump After Strong Q2 Earnings Report
Salesforce shares (CRM) experienced a significant surge in premarket trading on Thursday following the release of the company’s better-than-expected second-quarter earnings report. The enterprise software company also raised its full-year profit outlook, thanks to increased customer spending on its suite of cloud products.
The positive earnings report comes as a relief for Salesforce, as its shares have been under pressure this year due to a slowdown in sales caused by leaner corporate budgets and growing competition in the cloud artificial intelligence (AI) software space.
At the time of writing, Salesforce shares were up 4.8% at $271.25, about 90 minutes before the opening bell.
Breakout From Symmetrical Triangle Pattern
Salesforce shares have been trading within a symmetrical triangle pattern since mid-May. The pattern was marked by a significant stock gap of around 20% early on. In recent weeks, the price has consolidated just below the triangle’s top trendline and 200-day moving average in anticipation of the company’s quarterly report.
The projected earnings pop positions the stock for a decisive breakout above this closely watched chart area, potentially marking the start of a new upward trend.
Monitor These Key Salesforce Chart Levels
Investors should keep an eye on several important price levels on the Salesforce chart following the company’s earnings report.
The first level to watch is around $287, where the stock may encounter overhead selling pressure near a trendline that connects the April 15 gap day high with a period of week-long consolidation in mid to late May. If the stock breaks above this level, it could move up to the $311 area, where sellers could look to offload shares around a range of comparable trading levels throughout March and early April, just below the stock’s record high.
To forecast a price target above the all-time high, we can use the measuring principle. By calculating the distance of the triangle in points and adding that amount to the pattern’s top trendline, we can project an upside target of $340. In this case, we add $75 (the distance between the triangle’s two trendlines) and $265 (the pattern’s top trendline).
Triangle’s Top Trendline Flips To Support
During retracements, investors should pay attention to the symmetrical triangle’s top trendline, currently positioned at $265. This level on the chart is likely to flip from providing prior resistance to offering future support. Additionally, it finds confluence from the nearby upward sloping 200-day moving average.
Conclusion
Salesforce shares experienced a significant boost in premarket trading following the release of its strong second-quarter earnings report. The breakout from the symmetrical triangle pattern and the potential for a new upward trend are positive signs for investors. However, it is important to monitor key chart levels at $287, $311, and $340, as well as the triangle’s top trendline at $265, which could now act as support.
Please note that the information provided in this article is for informational purposes only and should not be considered as financial advice.
