When you’re the biggest maker of customer relationship management software on the planet, you have a whole lot of eyes watching your every move.

Just ask San Francisco-based Salesforce.com (NYSE: CRM). The company has become a bellwether for the red-hot cloud computing space. Its prominence in the industry means that its shares are heavily traded and often volatile.

The company seems to always be making headlines, and for a variety of reasons.

First, its focus on bringing in revenue and reinvesting in its business — similar to the way Amazon.com (NASDAQ: AMZN) does things — has resulted in a lack of actual profits. This has led to negative earnings surprises in each of the past four quarters.

#-ad_banner-#More recently, the company suffered a malware attack aimed at stealing customer log in information. The malware, known as Dyre or Dyreza, was the same that was aimed at major financial institutions such as Bank of America (NYSE: BAC), Citibank (NYSE: C) and RBS (NYSE: RBS). 

Then there was the September insider sale by the company’s CEO and Chairman Marc Benioff, who liquidated several million dollars’ worth of CRM shares.

For CRM shareholders, the initiation of coverage by Robert Breza of Sterne, Agee & Leach was a welcome bullish headline. Last week, he issued a “buy” rating on the stock with a price target of $70. 

In his note to clients, Breza said: “In our opinion, [CRM] will expand its dominance into customer service and marketing, with developments to be expected in analytics, while unifying sales, marketing and customer service operations with an advanced platform across the enterprise including next generation mobile and social interactions.”

Like Amazon, Salesforce has proven it can generate huge revenues, and that it can grow into the dominating company in its wheelhouse segments. 

In late August, CRM reported fiscal Q2 revenue increased 38% year over year to $1.32 billion. That translated into a bottom line loss of $61.1 million, or $0.10 a share versus a profit of $76.6 million, or $0.12 a share, in the prior year’s quarter. However, when you take out items such as stock-based compensation expenses, the company did post an adjusted profit of $0.13 per share compared with $0.09 a year ago.

For Salesforce.com, an important metric is “deferred revenue,” which calculates future revenue from subscription-based clients. In Q2, that number grew by 31% year over year. There is also what is called “unbilled deferred revenue,” which measures contracted business that has yet to be billed, and is therefore technically off the balance sheet. In fiscal Q2, this figure rose 32% to approximately $5 billion. 

CRM represents one of those situations where you have to read a little beyond the headline numbers to understand just how strong the financials really are. 

Of course, for traders we also have to see what our fellow buyers and sellers are doing to determine if it is time to move in. 

In the chart below, we can see that the shares have seen a lot of volatility, particularly so far in 2014.

CRM spiked to an all-time high of $67 in late February, which was followed by a significant sell-off that took shares to a 52-week low just above $48 in late April.

Shares retraced about 50% of that decline by early summer, only to fall back below their 50-day and 200-day moving averages in July. 

In August, shares vaulted back above both short- and long-term trendlines, running above $61 by September. But the CEO’s sale of a big chunk of shares pushed CRM back toward support late last month.

In my opinion, now is the time to get long CRM while it is below $58. If it hits Breza’s $70 target, traders could capture a gain of more than 20%. If shares get a little help from a bullish market in Q4, I suspect that price target could be reached in the next six months. 

Recommended Trade Setup: 

— Buy CRM at the market price
— Set stop-loss 8% below entry price
— Set initial price target at $70 for a potential 23% gain in six months

Note: There is a proprietary stock market indicator that’s never been revealed to the general public. In just six months, it tagged 71 stocks right before they jumped 10% in two weeks. And it’s tagged 21 stocks right before they jumped 20%. To see how it does it — and to get the name of a stock flashing “buy” right now — click here.