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    Today’s Trading Edge: Salesforce shares surge after Q1 guidance topped analyst estimates

    WWM_CRM_FEB_24_2016.jpg 

    Salesforce.com Inc. (CRM) delivered both fourth quarter numbers that came roughly in line and provided better than expected first quarter guidance. Shares for the cloud computing company rallied 9% in after-hours trading. Price appears poised to make a run towards the 50-day SMA, which currently trades around the $70 handle.

    Salesforce reported a fourth quarter gain of $0.19 a share, matching analysts’ estimate. Revenue printed at $1.81 billion, a beat over the estimated $1.79 billion. The company also reported unbilled deferred revenue climbing 25% to $7.1 billion. For the first quarter, revenue was guided between $1.89-1.90 billion, much higher than the eyed $1.85 billion analyst estimate.  

    Price action on the Salesforce 240-minute chart show that the initial rally took price close to the February high of $69.09. Price is also breaking out above the bearish trendline that has been in place since the end of last year. If the bullish rally continues, the next major resistance level may come from the $70 to $75.00 zone.

    If downward momentum returns and the $64 is breached, major support will come from the $60.00 handle.

    The Trade: Buy Salesforce shares at $67.50, with a stop loss of $71.50 and take profit of $65.50. The risk/reward ratio is 1:2   


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