Salesforce (CRM) Price Forecast: Countertrend Bounce Signals Potential Upside

Short-Term Bottom and Countertrend Rally

Shares of Salesforce, Inc. (CRM) are showing signs of a short-term bottom, with price action this week favoring a continuation of the countertrend rally. A strong weekly bullish engulfing pattern completed, signaling buyers stepping back in. The reversal gained confirmation with a weekly close above last week’s high of $193.00, finishing at $194.60. With upside momentum improving, traders will be watching for fresh bullish setups on pullbacks into the weekly range of $174.57-$201.04, if they occur, or a decisive breakout above this week’s high, which would further strengthen the bullish case.

AI Fears and Key Retracement Level

The recent selloff in CRM mirrored weakness across software stocks as fears grew around potential negative impacts from AI on business models. Price hit a low of $174.57 on Monday, completing a 78.6% Fibonacci retracement of the advance that began from the 2022 low at $126.34. The bullish weekly pattern that followed points to the likelihood of a larger bounce into prior support areas, now overhead and likely to attract selling pressure.

Breakdown From Major Long-Term Support

From a longer-term perspective, a major support zone had been tested for roughly five months before finally giving way in early January. The breakdown of a small broadening formation below $218.96 triggered a deeper decline. That zone carried heavy technical weight: it included the neckline of a head and shoulders top, both the 200-week and 20-week moving averages, and a long-term uptrend line along the lower boundary of a large ascending trend channel. The second point of the neckline also aligned with the 38.2% Fibonacci retracement ($230.03) of the full bull trend that began from the 2008 low at $5.21, reinforcing the importance of the area.

Resistance Overhead and Downside Risk

The confluence of these indicators underscored how critical that price zone was. Notably, the 50-week moving average is now acting as dynamic resistance, with price rejected near it during the two most recent rebounds prior to the breakdown. Once prior support is successfully retested as resistance, bearish sentiment often reasserts itself, increasing the odds of a second leg lower developing from the long-term support region.

Measuring the head and shoulders top projects a potential downside target near $149.10, which aligns closely with the 88.6% Fibonacci retracement at $153.56. If price reverses lower after confirming resistance overhead, the broader downtrend may resume despite the current countertrend bounce and improving short-term momentum.

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