Target that blue chip stock in January
CRM has a history of optimistic returns in January
As the year draws to a close, we anticipate which stocks could be the potential winners in January. Although there are several notable actions in terms of potential short coverage, there are a lot of stocks that seem to be doing well at the start of the year. One of them is a member of Dow Salesforce.com, inc. (NYSE: CRM).
According to data from Rocky White, senior quantitative analyst at Schaeffer, over the past 10 years, CRM stock has been one of the top-grossing stocks to own in January. CRM is also one of two software names on White’s list of the 25 best stocks of the S&P 500 (SPX) to hold this month, posting an average return of 6.1% with 80% positive returns. A move of similar magnitude would put Salesforce.com stock above $ 271.
If a move like this were to occur, the CRM would break through the pressure at the $ 270 level, which limited stocks earlier this month. Additionally, stocks appear to be on the rise, having rebounded from a four-month low to the $ 241 level. The stock recovered its 10-day moving average this week and appears to have found a potential bottom at the $ 253 level. Year-to-date, the blue-chip stock is up 14.5%.
Meanwhile, the options stands were much more pessimistic than usual, despite more calls than puts on an absolute basis, and a change could provide favorable winds for the stock. The 50-day buy / sell volume ratio of 0.59 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) is in the high 96th percentile of its annual range. In other words, it suggests a very healthy appetite for recent long puts.