Target This Blue-Chip Stock in January

CRM could break above pressure on the charts nextmonth

Deputy Editor
Dec 31, 2021 at 10:49 AM
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As the year comes to an end, we're looking ahead to what stocks could be potential winners in January. Though there are several noteworthy stocks in terms of potential short-covering, there are plenty of stocks that just seem to do well at the start of the year. One of these is Dow member Salesforce.com, inc. (NYSE:CRM)

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, over the last 10 years, CRM stock has been one of the most lucrative stocks to own in January. CRM is also one of the two software names on White's list of the 25 best S&P 500 (SPX) stocks to own this month, boasting an average return of 6.1% with 80% of the returns positive. A move of similar magnitude would put Salesforce.com stock above $271. 

If a move like this were to occur, CRM would break above pressure at the $270 level, which kept a lid on shares earlier this month. Plus, the shares appear to be on their way higher, after bouncing off a four-month low at the $241 level. The stock this week reclaimed its 10-day moving average, and appears to have found a potential floor at the $253 level. Year-to-date, the blue-chip stock is up 14.5%. 

Meanwhile, the options pits have been much more pessimistic than usual, despite calls outnumbering puts on an absolute basis, and a shift could provide tailwinds for the stock. The stock's 50-day put/call volume ratio of 0.59 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is in the elevated 96th percentile of its annual range. In other words, this suggests a very healthy appetite for long puts of late.

 

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