Chart development: Salesforce has an interesting technical setup underway. Before earnings, the stock appeared to be forming a cup pattern. After reporting earnings on August 26, it posted a Power Earnings Gap (PEG) on August 27.
Since then, the stock has moved up toward what appears to be a resistance zone, pulled back, and is now testing the 21-day EMA. Given that price action, the setup now appears to have evolved into a potential cup-with-handle pattern, although confirmation is still needed.
Trade plan: I have an alert set on the handle’s downtrend line. If that alert triggers, I will look for a possible entry because the risk/reward would be clearly defined.
Reminder: As always, if you like this idea, make it your own by applying your personal trading or investing rules. After all, it is your money at risk.
Since then, the stock has moved up toward what appears to be a resistance zone, pulled back, and is now testing the 21-day EMA. Given that price action, the setup now appears to have evolved into a potential cup-with-handle pattern, although confirmation is still needed.
Trade plan: I have an alert set on the handle’s downtrend line. If that alert triggers, I will look for...