Could Zoom Still Make a New All-Time High?

Recent posts about Zoom Video Communications Inc. (ZM) noted that because of ZM’s recent decline while the S&P 500 (SPX) rallied, increased the risk of buying ZM.  An abundance of evidence is needed to take a trading position and this stock still lacks enough evidence to make a long recommendation.

ZM does continue to be a valuable market indicator and needs to be watched.  The primary reason is the clear Elliott Wave pattern which is illustrated in the daily ZM chart courtesy of Trading View.

The supposed Primary wave “4 – boxed” decline was 37.7% the largest since the rally began in late 2019.  The supposed Primary Wave “2 – boxed” fell 18.1% which is 48% of Primary wave “4” and close to a Fibonacci .50 relationship – common among waves “two and “four”.

Also, the bottom of Primary wave “4” had an RSI reading of 32%. The Primary wave “2” RSI reading was 33%. Near equality of an  oversold level is what would be expected for waves of the same degree.

Since 11/10/20 there have been two bullish signals, First on 11/10/20 ZM daily Stochastic had a bullish divergence. Second, on 11/20/20 ZM was up 6.11% while the SPX declined 0.68%.

This is still not enough evidence to issue a long recommendation. Additionally, within the last four trading days ZM has risen 16%. As of 11/20/20 ZM is too far a above the area to place a stop loss – which is the short-term bottom made on 11/16/20. A potential loss of 16% is too large.

If ZM is in a Primary wave “5” rally it could reach at a minimum the October high of 588.84.    

Whichever direction ZM takes in the next several weeks it could give valuable evidence regarding the  broader US stock market.  

Keep watching ZM.

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.

5 thoughts on “Could Zoom Still Make a New All-Time High?

  1. Happy Sunday, Mark. Thanks once again for your valuable stock information. Your forecasts and keen insight on the market are so very helpful. Happy Thanksgiving a little early — we are all thankful for your vital financial help!

    Like

  2. Mark, you’ve done it once again! Informed us about a vital and growing company to watch and then possibly buy. Happy Thanksgiving to you a little early. Many of us are very thankful for your insight and willingness to share it.

    Like

  3. Not to put you on the spot…
    But at what specific value area price point,(considering any short term pullback)
    does the Elliot Wave suggest that one would be a buyer of ZM ?

    Like

    1. ZM getting near the recent low of 375.00 would be a start. There are other factors such as momentum indicators that would need to be giving bullish signals. I will be giving updates on ZM.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: