The cloud stocks have been wonderful stocks during this bull market … the longer-term weekly charts are starting to show that the best days for these stocks may be behind us.
CRM – Weekly Chart
Price pushed to new all-time highs last week, but that weekly candle actually looked like a potential doji topping candle. When I look at the Time Segmented Volume indicator on the second panel, it is clear to me that money flows have been weakening in this name since September 2018.
Relative strength vs the SPY is also showing weakening performance … the 8 period momentum indicator is fighting to stay above the +ve/-ve mendoza line.
The bottom line is that the days of leading the market by a large margin are likely a thing of the past.
CRM – Daily Chart
The daily chart shows in greater detail the weekly charts’ weakening … the ATR and 20SMA are still in bullish positions, but indicators are clearly showing a weakening of strength. Obviously, things can re-accelerate from current levels, but I think the bigger weekly chart is foretelling an overall weakening stock performer.
Bottom Line – I am going to start writing out of the money calls until the charts turn more bearish – at that point, outright shorting intra-day or positionally may be good risk/reward trades.
Cheers … Leaf_West