First Order Cloud Name Salesforce.com, inc (NYSE: CRM) is down 2.2% to trade at $ 236.96 at last check. A catalyst for today’s decline is unclear, although the attention of retail traders sites like Stocktwits can play a role. Regardless, the stock is up 25.6% year-over-year and just hit an eight-month high of $ 253.50 on July 7. Better yet, the CRM has just returned to the trendline with historically bullish implications, which could push the stock higher on the charts in the coming weeks.
Digging deeper, the Salesforce stock moved closer to one standard deviation of its 40-day moving average, after spending nearly two months above that trendline. According to data from Rocky White, senior quantitative analyst at Schaeffer, at least seven similar signals have occurred in the past three years. Stocks returned positive a month later in 86% of those cases, with an average gain of 6.1%. From its current location, a comparable move would put CRM above the $ 250 mark, much closer to its eight-month peak.
Security could also benefit from a change in sentiment in the options pits, which have been a bit more bearish than usual This is according to CRM’s 50-day international sales / call volume ratio. Securities Exchange (ISE), Cboe Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX), which is in the high 88th percentile of its annual range.
Echoing this, the open interest ratio (EVEN) of the Schaeffer stock to the Salesforce stock of 1.04 is above 97% of the reads in the past 12 months. Put simply, short term options traders have rarely been more put oriented.
Finally, CRM bonuses can be obtained with a discount now. The stock’s 24% Schaeffer Volatility Index (SVI) is in the low 8th percentile of readings of its annual range. This means that options players are evaluating the low volatility expectations for the stock at this time.