The markets began to bounce back Wednesday from the selloff that started the week, but momentum stocks are still feeling the heat, specifically Salesforce.com.
Shares of the cloud computing company are down around 7% in the past three trading sessions, and have fallen more than 17 percent since hitting an all-time high on February 28. So, will the skies clear up for Salesfoce.com, or is there more pain to come?
“I think this company, they’re dominating the space,” said David Seaburg of Cowen and Company. “They’re at the front end of basically all big data companies.”
But, based solely on the technicals, John Kosar of Asbury Research sees more downside for Salesforce.com.
“The charts say for the near-term we’ve probably got a little more downside to go,” he said. “I think we can go back down to $51 [per share] which hits that trend line that started about a year ago. That’s 6 percent lower than where we are.”
Kosar’s main concern is the stocks inability to recover from a steep decline from the high in February to the low in April. “It looks to me for a near-term trade, I would wait for $51 . And if we break $51 , we could end up back in the high 40s again. I would not buy them here.”
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