PreMarket Prep Stock Of The Day: Salesforce

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

A top-performing issue for most of 2020 has hit the skids and is attempting to breach a major support level. That issue is Salesforce.com CRM and is the Premarket Prep Stock Of The Day.

Roaring For Most Of 2020: After ending 2019 at $162.64, the issue blasted to a new all-time high in February to $195.72. It got crushed with the broad market in March falling to $115.29. That marked the lowest level for the issue since its November 2018 low ($113.60).

From that level, it embarked on a five-month win streak that was snapped in September after making a new all-time high at $284.50. For the month of September, it declined from $272.65 to $251.32.

After a prolonged decline from September to December, it finally bottomed at $212.99. Interestingly, the rebound off that low matched the September close almost to the penny ($251.23 vs. $251.32) on Feb. 16.

Going Down On Mostly Good News: After the close on Feb. 25, Salesforce reported quarterly earnings of $1.04 per share, which beat the analyst consensus estimate of 75 cents. The company reported quarterly sales of $5.82 billion, which beat the analyst consensus estimate of $5.68 billion. The company also raised guidance.

Overall, not too shabby of a report. In the following session, it fell from $231.06 to $216.50 and has not found a bottom yet.

Hovering Above Major Support: Until Wednesday, the low for the year was $212.99 and had two other daily lows within a few dollars ($215.55 and $213.70), Not a perfect triple bottom, but a major area of support. In Tuesday’s session, the issue settled just off the ultimate low ($212.99) at $213.47.

With a weak broad market today, the issue was not able to reach Tuesday’s close, only reaching $213.32 off the open and collapsed. As of 12 p.m. ET, the low for the session stands at $208.20 and is attempting to rebound.

Moving Forward: Based on the daily charts, the issue may have a date with $200 as there are a pair of lows from Aug. 18 ($199) and Aug. 18 ($200.03). However, there is no monthly support until its ultimate August low of $191.72.

If looking to purchase the issue on strength instead of weakness, perhaps wait to see if the issue can rebound and sustain above the former low of the move.