CRM broke above above resistance at the $265-$267.50 range
Subscribers to Schaeffer's Weekend Trader options recommendation service received this CRM commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
Blue-chip software stock Salesforce Inc (NYSE:CRM) broke above resistance at the $265-$267.50 range late last week, which also coincides with its year-to-date breakeven level. Plus, the shares went on to stage a bounce after a retest of this level.
CRM also just crossed above its 200-day moving average, which is still sloping higher. With these layers of technical support in place, now looks like a good time to bet on the stock’s next leg higher.
In the options pits, Salesforce stock’s 50-day put/call volume ratio of 0.85 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the 91st percentile of its annual range, meaning options traders have been much more bearish than usual. The last two rollovers from this area have marked bottoms around it.
Options look like a good way to go when considering CRM, as it’s seeing well-priced premium at the moment. This is per the stock’s Schaeffer’s Volatility Index (SVI) of 24%, which ranks in the low 12th percentile of its 12-month range.
Our recommended November call has a leverage ratio of 11.4, and will double on an 8.9% rise in the underlying shares.