CRM has been our big winner thus far falling over 3% the past two days. Things still look rather weak as you can see from the chart below. Today's definitely shows distribution taking place with the increase in volume versus Monday's action. CRM is approaching a trend line currently so you should be ready to take some profits off the table. It has given us a good move thus far so there's no use in being a greedy pig. Oink Oink! (Disclaimer:I am currently short the stock)
Now the current markets are somewhat of an enigma. Volume has been non-existent yet the market continues to grind higher. Shorts are out there, circling like sharks, waiting for the market to give out but so far the markets have been nothing short of resilient. There are opportunities on the long side, and the short side, and I am determined to find them for you.
One short position that I'm taking a liking to and I will be taking a position in is VMW. Looking at the weekly chart below you can very clearly see that a head and shoulders pattern in showing up on the chart. The most important part of the head and shoulders formation is the break off the top to the form the right side of the head. With this break you want to see a big increase in volume and you get this here. As the stock rallies up you see volume starting to decrease and the stock starting to stall around the 10 week moving average (similar to the 50 day moving average on a daily). This gives us an excellent opportunity to put out a short position with a low risk/high reward potential. (I plan on taking a short position in this stock in the 24-48 hours)
Til next time,