$CRM . Salesforce breaking down.

If cloud computing is a leading sector in the tech, then the chart for is a sign that the tech industry is breaking down.

And by extension, entreprise spending is tightening in 2012.

From the Ichimoku Daily Chart, we can see that CRM as far as back as November in 2011 when it pierce through the kumo.

After which the counter rally, fail to go above the kumo.

From December till now, we can see 2 gap down on the chart; adding more strength to the bearish reading.

We can also see how the chart is showing a possible letter ‘h’ formation.

From the Weekly Chart, we can see that the next possible support is around $86


Tech (CRM) : Trade review

I mentioned about (CRM) previously and about its consolidation.

I was late in the game and did not manage to catch CRM when they announced earnings.

As mentioned in my previous post on CRM, I am expecting that it will consolidate before moving up further.

The key is to find another entry point.

August 27 proves to be a good entry point as CRM dips down and shortly goes back above the level of 109.73

The general market condition wasn’t clear on its direction.

I was not at all convinced that CRM will be able to make  a new high if the broader market is down.

What I did was to sell a vertical Sept 105/110 put.

This provides me with some buffer if I am wrong about CRM. At the same time, I make a bet on its bullish move with time on my side.

Today, with the broader market rally, CRMwas able to break through resistance 113.77 and establish new high.

If the broader market bullish move holds, I estimate that CRM should be able to hit a target price of 121 by end September.

Let’s keep my fingers crossed and see if this estimate will work out.

Tech (CRM) : Breakout and consolidation

Marc Benioff reported results on August 19 with the following quotes:

Second quarter revenue of $394 million rose 25% year-over-year. Even with an annual revenue run rate approaching $1.6 billion, our revenue growth is accelerating. At 25%, second quarter revenue rose at its fastest rate in six quarters and it represents the third quarter in a row in which growth rate has now increased.

Non-GAAP EPS of $0.29 was well above our outlook entering the quarter. GAAP EPS was $0.11.

We also delivered roughly $76 million in operating cash flow, an increase of more than 66% from a year ago. Over the past 12 months, our business has generated more than $340 million of operating cash and we exited the quarter with roughly $1.9 billion of cash, cash equivalents and marketable securities.

Finally, I am pleased today to announce that we are raising the high end of our full year fiscal year ‘11 revenue guidance to $1.6 billion. This is a huge new milestone for

As we can see from the chart below, the market responded positively with a gap-up and high volume  trades.

Currently, we are seeing some consolidation which is a good sign as the general market is bearish. This suggests the positive outlook for

We should be able to find a good entry during the consolidation. After which, it should break up to the high side.