The Big 3: CRM, DG, HPQ

get your podcasts. Welcome back to trading 360. I'm Marley Kayden. It's time for the big three. We've got three stocks three charts and three trades for you. Rick Duquette of course taking us through the charts here to take us through the trades today. Jason Brown stock market expert at the Brown report.com and author of Five Year Millionaire. Jason great to have you back on. And what a day to have you, right. We finally heard from Nvidia moving to the upside. We got some other really strong tech earnings yesterday from Salesforce and CrowdStrike. How are you looking at the markets right now? Yeah Marley always good to be here. Good to see you. And Rick. You know the market is still trading at record high territory. And although we got some great earnings from Nvidia I love that it was spread out across sectors in tech. So you had software which is CRM who had great earnings. You had semiconductors and chip Nvidia who had great earnings. But then you also had great earnings out of CrowdStrike, which is in the cybersecurity space. You kind of had a broad positive boost in earnings from tech stocks. I also see that as somewhat of the problem. If you look at the rest of the sectors that make up the S&P 500, tech is the only thing that's up today. So I'm bullish. You know long term I'm bullish. But I'm cautiously bullish because inflation interest rates are still in the passenger seat. As this car in stock market continues to chug higher. All right. I'm excited because your first pick is actually one of these earnings names that's having a pretty significant move to the upside today. We're talking about Salesforce. They're up more than 21% a lot of which tied to this Claude Force concept, which I just love saying, although I want to say it like Mortal Kombat every time. How are you looking at Salesforce right now, Jason? I mean, we've had this considerable move to the upside. Are you expecting us to go higher here? I am expecting us to go higher. You know, for the past year, investors have worried if AI could destroy traditional software companies like Salesforce, everyone you know, AI is going to kill the business. People are going to build their own CRM and all this and that. But major companies don't want to build their own CRM. And even if they do, they like building it on the backbone of Salesforce and with the customization, and that's showing up in their earnings report. So the numbers, when I peel back the numbers and really broke it down, you had the Q2 revenue was 11.35 billion, which is up 11% year over year. And then their agent force and their data, 360 approached 3.9 billion, which is up more than 200%. But what I think is important about the numbers is that their non-GAAP operating margin was 34%. So they had a 34% margin on those numbers, which is huge. And then from a technical standpoint, and we'll get into the charts, but the stock has been trapped below the 200 day moving average since, you know, March of 2025. And this this past week, we popped above the 200 day moving average. But today we got an even further lift off from that moving average. Which leads me to believe that the trend is changing. And then the fundamentals from the earnings report is supporting what we're seeing in the chart, which is why I believe it'll go higher. All right. And the commentary from management saying that none of the dire predictions about the end of software apply to Salesforce. Looks like the street's buying in today, Rick. I mean, they've pretty much erased all of our 52 week losses. They're mostly flat now over the last year. What are you seeing in the technical setup here. Yes. And on pace now for a 71% rally off of these lows that we saw relatively recently near about 146 only a couple months ago at this point. So a big push to the upside today. So if we were to digest this move a bit more, 228 is a level that stuck out to me, because that's where a gap began in the past back in January here. So if we do start to get some kind of pullback, that might be an area where you could possibly look for potential support. But so far we remain near the highs of the day. It's still you know, the day is still early. A lot can happen over the course of a trading day, but for now it's seeming like quite a strong move below that as well. 219 another low point before a before that same gap happened here. And then we had another gap at this level here, our third green line that also was resulting in eventual highs around 210. Meanwhile to the upside, we're getting pretty close to an area that stands out as potential resistance. Another gap here that matches up with some subsequent lows and a breakdown point that stands out near about 252. And then on the road to the 267, which is around where we saw a repeated series of highs previously in this in this chart here. So when we think about our next chart here, which is our moving averages, we are looking at a group of exponential moving averages here. Our five day EMA in dark blue comes in around 20 or 2 2050. So these are inherently lagging indicators here. So when you do have a very fast, strong price move here, it'll take some time for them to catch up and be relevant once more. But the five day EMA being the shortest of our four, will be the one that will catch up the most quickly. RSI 79.6 right now, breaking above that 70 threshold that represents a push into the overbought area, typically regarded as a sign of strength in a trending market. Kind of counterintuitively to what the name might suggest at a glance. So volume nodes here near about a 225 to 231, that could be an area to watch. If we do retreat once more, we have crossed above a larger node, the largest of what is near us currently. 239 to 247. Another pocket of activity up here. 253 to 260. All right, so Jason, with all of that technical information, then how would you go about trading Salesforce, especially with this pop that we're seeing today up more than 20%? Yeah. So absolutely, as a trader, you want to be careful here that you're not chasing the stock. You already know that the call options are going to be inflated because of the big move today. So I don't necessarily want to be a buyer of a directional call, but I definitely think the stock either goes higher, stays the same, or maybe pulls back slightly as Rick talked about potentially to cover those gaps. So I'm looking at this as a bull call spread. I'm sorry, a bull put spread the November 20th, 2026 expiration. When I looked at this the market was about 930. We were just open. So we weren't up an additional 20 points from the open. So these numbers may be a little bit different, but the 190 strike price you want to buy that it was going for about 330. And then you want to sell the 200, which was going for about 530. You're getting a net $2 credit, you're risking $10, but technically you're risking eight because you're getting paid $2 to take the trade. So when you do the math on it, as long as the stock stays above the $200 price point, you're basically pulling in about 25% and 85 days. If you do that four times a year, that's 100% return. So that's a really nice risk reward ratio for this trade. And then given how far the stock has run, you already have some built in cushion now because the stock has run since we looked at this trade. You may want to adjust it 20 points. So you may want to consider the adjusted version of this is buying a 210 and selling a 220. The bottom line is you want to be in a position where if the stock goes up, you win. If it goes sideways, you win. And then you have at least 3040 points of margin if the stock starts to come down. And even with that adjustment, we're still about $50 above your break even level here for that Salesforce trade. You've got another earnings mover today in the big three though. You've got Dollar General this time not as significant a move up 6%. So a really nice move here to on a beat and raise quarter for Dollar General as well. What are you seeing in Dollar General Jason. Yeah we're looking at all earnings stocks today. You know Dollar General obviously it's a discount store. They got about 2000 locations. You got food household products health goods. But the story here is Dollar General is really a play on the American consumer. When the consumer feels pressure from inflation and fuel costs and expenses, which continue to remain elevated, they don't just stop spending because we obviously need some of these products. We also are entering into a season of back to school shopping. Then you have Black Friday and, you know, the Christmas holiday shopping coming up. And so I think this is where Dollar General is going to shine. If you look at their sales, it increased 5.2%, same store sales, 3.5%. But what was interesting is that customer traffic increased 2%. So that kind of feeds that narrative that more customers are starting to say, you know, maybe I should run to the dollar store for this. Maybe I should run to Dollar General for this, maybe as opposed to a Walmart, maybe as opposed to a target, maybe even as opposed to buying it online through Amazon. And so that's good news for them. If their traffic can increase and they're making money, not just because they raise prices, but because more people are shopping and more people are buying more things from them. That is what I saw from the numbers and why I like this chart. From a technical standpoint, the stock appears to be forming an inverse head and shoulders, which is typically a bullish reversal pattern. So I love that. And then with today's earnings move we finally popped back above the 200 day moving average. So if this breakout holds we could look for a move potentially back up to the 160 area. So I like this from a fundamental story. And then I love the double technical setup, the inverse head and shoulders, as well as getting back above the 200 day moving average. All right. Rick, I don't know about your kids, but my daughter can't be in the car and drive past any dollar store. Dollar general, dollar tree, what have you without asking to stop so clearly driving some of the shopping there. What are you seeing, though, in the technical setup now that we have this pop to the upside? Sure. And to kind of highlight inverse head and shoulders type activity here, one shoulder, one shoulder here. And then we had this area down here. That would be the inverse head area. So then we would also have kind of a consistent ceiling here that we've formed. So this would be typically more of a bullish type of setup here. So the break above the neckline is what you'd really want to see. But a shorter term look kind of shows that we have a range that's been established here. 114 to about 131 or so for now, even though we have broken out from the symmetrical triangle type of shape that we have here, we have not really crossed above that level here. So an interesting setup. We had our triangular price activity suggesting lower volatility than we had our extreme breakout activity after earnings. But now the last threshold that needs to be crossed before we can get that kind of runaway price activity is to break above this consistent ceiling we've seen near that area. So from there, 140 stands out because it was an old low and a subsequent high. And then we also had 144, which was a gap level here. So that stands out as an area to watch to the upside going forward. Meanwhile, to the downside, recent lows near 118 and the bottom of our range near about 114 would be the supportive points to be on the lookout for. The moving averages in this case don't really show any signs of the trend starting to to wane or anything. I mean, we're now just starting to see acceleration and divergence of the moving averages here, and that they're pulling apart from each other, suggesting the trend is improving right now. Our lows came in near our five day EMA, around one 2540 or so. RSI showed a matching triangular pattern to price. We are now breaking out above our downward sloping trend line as well. On the road back to that 70 threshold for the overbought area. So our volume profile in this case shows a node here that we have crossed above 123 to 126. Another node here a bit smaller near about 133 to 138 stands out. All right Jason. So as we look to trade Dollar General, are we giving ourselves the gift of duration on this one or is it a shorter term play? I would call this a little bit of a medium term play. So I'm looking at this one out to December 18th, 2026. Again, I think you got a lot of things going for it. You have back to school shopping, you have Black Friday, you have the holiday season coming up. And if inflation and things remain sticky, oil prices, gas prices remain higher. You're still going to get gifts. You're still going to need some of these things. And I think you're going to consider a place like Dollar General for this. So December 18th, the 110 strike price, it was going for about $24. What I like about that, it puts your break even at 134, which is not that far off from that resistance level that Rick drew. The resistance level was around 132. So if we can get two points above that, we're right at break even. And we got December to do that. Obviously, if it does it before December, you'll be in the profit. And then I love that. You know I already thought through, if this starts to go sideways or pull back a little bit, you want to consider selling the 135 for protection. That's going for about $9 right now. So you can bring in, I don't know roughly about, I think about 35, 40% of your trade cost by just turning it into a covered call if need be. But I would just keep that in my back pocket as a trade adjustment. If we feel like it's not doing anything in time is working against us all right, Dollar general though, seeing a nice pop today. We're up 6.25%. Your last earnings play here is one that moved to the downside. We're talking about HP investors a little disappointed with some of the results that they put up. The numbers looked good. But when you remove the tariff impact they are less impressive here. So Jason, walk me through your thesis on HP. Yeah. So revenue reached a record 15.7 billion. It was up about 13%. But you're right. Some of the money that came in was from a tariff refund. But that also goes to show how, you know, when these tariffs and wars and oil things cool off. That should have been money that that money shouldn't have come out of the company in the first place. So it just shows how these decisions and political things can affect these stock companies. But when you take a look at what's happening with HP, this isn't the first time they had great earnings. And then the stock, at least the last one stock popped, and then it sold off and pulled back to the moving average. So we kind of didn't get the pop today, but we got the pull back to the moving averages. What I think is positive for this company is people are there is a need for better and higher quality computing, especially with AI and the things that you want to process. And so management and leadership said that a lot of the decline was due to or PC volume decline was due to people holding off on upgrading their PCs. Also, the increased price in memory was costing units to cost more, which makes people kind of wait a little bit longer. But I think it's going to get to a point where people can't wait, and they also are going to prefer the higher cost, higher quality machines, which bodes well for a company like HP. If and when memory costs come down. And it will, it won't stay elevated for forever. So I look at this more as a potential opportunity to scale into the stock versus run from the doors for it. All right. So Rick, as we look at the technical setup here, we know we're moving lower, which is dragging us down on the week. But it was performing well. It's still positive on the year. As we look here despite this downward sloping channel that I see. Yeah. And much improved from the lows of the day that we saw to those came in near 26.73. So we are down a good bit from yesterday, but we had a kind of a surge to the upside that took us up to 3083 or so. The highs 3219 also stand out. So these are some upside levels to watch out for. If we were to start breaking lower once again, a relative low beyond today's intraday lows comes in at 2605. Downward sloping channel is still in play. We have recovered back above that pattern that we established just recently here. So that remains an area to watch out for in the coming days. Our moving averages here show that we are now pretty close to our 21 day EMA and teal there. 2885 is where that one comes in five days just above it, 2950 or so. Meanwhile, to the downside, our gold 63 day, our quarterly EMA is around 2640. So that could be a supportive area to watch out for. RSI trending lower downward trend line still in play here just above the 50 mid line. A breach of that level would signal a shift more toward bearish momentum. In this case, our volume profile shows that we are remaining above a node here near about 2750 to 2850. Another smaller one near 2650 to 27 is around where we had our lows so far today. So those are some areas to watch for potential consolidation. From this study's perspective. All right Jason. So then as we look at how we would play HPQ here in terms of a trade, what are you thinking in terms of duration and what levels are you looking at. Yeah. So duration I'm sending this out to January 15th 2027. So you've got 141 days. Plenty of time. I was looking at the 23 strike price at the open that was going for 550. Now I'm just looking at it and it's going for about 650. So it's already up about a dollar because the stock is off the bottom from where it got down to. But sticking with those numbers, the break even would have been 2850. And when you look at that and you say, okay, the break even is 2850, when you look at the chart here, the stock went as high as $32 recently. And so that's not improbable for it to get back to that level or at least get to the break even before January 2027. And then I'm wrong level on this. If the stock breaks down below the 50 day moving average, we want to cut our loss. It sold off to that this morning. We've bounced off of it and we're off of it now. We still got the rest of the day to see what happens, but we want to make sure that level holds. If that level breaks, we just want to cut our loss and move on from this one. All right. And right now with HPQ, we are down more than 5.5% following that earnings report. Jason, always appreciate you being