Cloud-Computing vs Crude Oil: Lessons in a Dramatic Chart


One of the biggest events in the history of the Dow Jones Industrial Average happened last August when replaced Exxon Mobil as an index member. A 21-year software company elbowed out a transnational giant tracing its origins to John D. Rockefeller and the dawn of modern capitalism.

Despite the stunning endorsement, things haven’t worked out so well for CRM since then. Its shares peaked above $280 one week later and then turned lower. (That was a giddy moment for growth stocks because Apple and Tesla had just split their shares.)

Additionally, TradeStation analytics show that CRM has gone 172 sessions without a new 52-week high. That’s the longest for any member of the Dow Jones Industrial Average. XOM, in contrast, hit a new high yesterday.

It’s a good lesson in froth and exuberance: Just when it seems things can never go wrong, it’s often a sign of the top. Other adages that could apply are “buy the rumor, sell the news,” or “be fearful when others are greedy.”

The chart above compares CRM to XOM since they traded places in the Dow. Notice how XOM lagged for a couple more months but then…

For more, please click here to view the related idea and chart analysis on TradingView.

Percentage chart comparing (CRM) against Exxon Mobil (XOM), courtesy of TradingView.
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