Salesforce.com Inc. (CRM)  gapped higher this morning after reporting better-than-expected earnings after the Tuesday close. The cloud computing leader also raised its growth targets.

If it's on your shopping list, the best trading strategy would be to buy shares of Salesforce on weakness to my semiannual value level at $123.44.

The stock closed Tuesday at $127.54 and opened this morning at $138.48 and is up 35.5% year to date. The stock was in bear market territory in sympathy with the recent correction in tech stocks and remains in correction territory 14.1% below its all-time intraday high of $161.10 set on Oct. 1.

Daily Chart for Salesforce

Courtesy of MetaStock Xenith

Shares of Salesforce opened above their 200-day simple moving average at $135.21 and traded well shy of their 50-day simple moving average at $141.57. The stock subsequently traded back below its 200-day, which is a key level to hold. If the stock closes below this average, the downside could be to my semiannual pivot at $123.44, which is the middle horizontal line on the chart.

Notice how the 50-day is converging towards the 200-day. If the 50-day falls below the 200-day a "death cross" will be confirmed which warns that lower prices will follow.

Weekly Chart for Salesforce

Courtesy of MetaStock Xenith

The weekly chart for Salesforce remains negative if the stock ends the week below its five-week modified moving average of $136.52. The stock is well above its 200-week simple moving average or "reversion to the mean" at $91.88. The 12x3x3 weekly slow stochastic reading is projected to decline to 27.45 this week down from 28.05 on Nov. 23. If the chart remains negative, Salesforce will fall into oversold territory defined by a reading below 20.00.

Given these charts and analysis, my trading strategy is to buy weakness to my semiannual, weekly and annual value levels at $123.44, $113.89 and $107.38, respectively, and reduce holdings on strength to my quarterly risky level of $151.77.

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.

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