close icon

Salesforce Bulls To Head for the Exits Soon

Salesforce .com stock fell to $2.25 in August 2004. What followed is nothing short of spectacular. Shares closed at $182.31 on Friday, up 8000% or 34% compounded annually. In other words, CRM multiplied investors’ money by 81 in less than 16 years.

However, even traditional valuation measures indicate the stock is getting ahead of itself. No trend lasts forever and we believe Salesforce is not immune to gravity, either. The chart below puts its phenomenal uptrend into Elliott Wave perspective.

Salesforce .com stock not immune to gravity

The rally to $186.44 so far looks like an almost complete five-wave impulse. The pattern is labeled (1)-(2)-(3)-(4)-(5), where the sub-waves of (1) and (3) are also visible. It looks like the latest all-time high is part of the fifth and final wave.

According to the theory, a three-wave correction in the other direction follows every impulse. The $200 a share mark seems to be within the bulls reach. On the other hand, once wave (5) ends, a notable retracement should be expected. Given Salesforce .com’s stretched valuation, a 40% to 50% decline does make sense. In our opinion, CRM carries more risk than reward at current price levels.

Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Plus500 Confirms Uptrend, but Correction is Likely

Based in Haifa, Israel, Plus500 (LSE:PLUS) operates a leading CFD trading platform. The company is part of the FTSE 250 index and conducts most of its business in Europe and Australia. The new ESMA regulations which came in effect in August 2018 severely impacted the CFD trading industry. As a result, Plus500 stock fell from…

Read More »

Moody’s, a Buffett Darling, Trading in Late Fifth Wave

Moody’s Corp. has been a long-time holding in the Berkshire Hathaway portfolio. It is also the seventh biggest position in it as of the end of March 2020. The company has a strong competitive advantage, it is highly profitable and growing. No wonder Warren Buffett likes it so much. The stock did decline sharply in…

Read More »

Dollar General Stock Bulls are Looking for Trouble

As a general merchandise discount retailer, Dollar General was among the handful of businesses that actually benefited from the pandemic. People piled on necessities preparing for what looked like the end of the world for a while. As a result, sales at Dollar General surged in the midst of the crisis. While its stock price…

Read More »

Veeva Systems Stock Trades in Bubble Territory

It is true that the Fed’s recently re-adopted zero rate policy and stimulus are distorting financial markets. Interest rates are like gravity to financial assets. The lower the rate, the higher asset prices go and vice versa. As a result, stocks in general tend to ignore the economic reality right now. Among the companies trading…

Read More »

PNC Financial Completes Bullish Elliott Wave Cycle

Economic crises have always been especially tough on financial companies. Usually, when the general market is falling, financial stocks are crashing even harder. PNC Financial for example, lost 81.6% in the 2008-9 recession, while the S&P 500 fell by “just” 58%. PNC Financial stock suffered more than the general market during the recent coronavirus selloff,…

Read More »

Avoiding the 54% Crash in Brookfield Partners

When we last wrote about Brookfield Partners, the stock was hovering around $44 a share. That was on July 27th, 2019. Back then we though the price can reach $50, but instead of celebrating, the bulls should be getting ready to leave. The reason for our skepticism wasn’t some special insight into the company’s operations…

Read More »

Alphabet Stock To $1700 and… Below?

Similarly to the market at large, Alphabet stock felt the tremors caused by the coronavirus panic. The Google parent’s share price fell from $1531 to $1009 between February 19th and March 23rd. One of the biggest and strongest companies in the world lost 34% of its value in a little over a month. However, thanks…

Read More »

More analyses