Zoom Update

My 10/17/20 post “Profiting From Zoom”  noted a clear Elliott Wave pattern for Zoom Video Communications Inc. (ZM) and that there could be support for a subsequent decline at what was labeled Intermediate wave (4).

The daily ZM chart courtesy of Trading View illustrates what’s happened.

The rectangle box highlighted in green is the area of the supposed Intermediate wave (4). ZM has broken below this support area.  Additionally, the day it broke support the S&P 500 (SPX) was significantly up.  You want to buy stocks that are outperforming the market – meaning the stock goes up when the broader market goes down. 

Breaking important support on the day the broader market has a big move up are bearish signals. 

Subsequently the daily Stochastic has had a bullish crossover in the oversold zone.  ZM has begun to rally and could even make a new all-time high.   ZM is a stock that’s had within the last year a huge move up.  Correspondingly, ZM at some point could have a huge move down. 

ZM is an aggressive stock and going long or short on aggressive stocks require abundant evidence before taking a position.  The bearish signals ZM had on 11/2/20 weakens the case for buying the stock – therefore at least in the near-term there will be no recommendation to buy ZM.

Successful trading is not always about going long or short, sometimes success can come by avoiding potential hazards.   


Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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