ZM longs have been absolutely eviscerated since 2020. One of the quintessential names of the 2020 exuberance, it has since seen a 90% drawdown from the 2020 high to the 2023 low late last year.
However, ZM has seen a trading range between 60 and 75 for almost a year now. This basing has clear analogs to Wyckoff accumulation, and the failed breakdown in October with low volume and no follow through could have finally put in a durable bottom. The 50SMA crossed above the 200SMA in January, providing a clue about the possibility for a shift in trend on this beaten down name.
If ZM sees markup and can break out of this accumulation range, it is possible we could see a gap fill of the August 2022 earning gap around 97.4.
As a trade, a tight stop at the recent low of 63.06 presents a very favorable setup, with a potential > 10:1 RR.
There was a time when ZM was a clear no-touch, and for good reason. But after the absolute destruction in value over the last few years, to finally allow price to re-align with more reasonable valuation levels, this name can finally be taken back out of the penalty box.
However, ZM has seen a trading range between 60 and 75 for almost a year now. This basing has clear analogs to Wyckoff accumulation, and the failed breakdown in October with low volume and no follow through could have finally put in a durable bottom. The 50SMA crossed above the 200SMA in January, providing a clue about the possibility for a shift in trend on this beaten down name.
If ZM sees markup and can break out of this accumulation range, it is possible we could see a gap fill of the August 2022 earning gap around 97.4.
As a trade, a tight stop at the recent low of 63.06 presents a very favorable setup, with a potential > 10:1 RR.
There was a time when ZM was a clear no-touch, and for good reason. But after the absolute destruction in value over the last few years, to finally allow price to re-align with more reasonable valuation levels, this name can finally be taken back out of the penalty box.
Trade closed: stop reached:
ZM broke through the last swing low at 63.06.
The next support region is the high 61 region cluster from .786 pullback at 61.96 and 1.236 corrective extension at 61.74.
If price does not bounce from these levels, a full retrace of the move from 59 becomes much more likely.
Monitoring price action around next support for another long entry. If price can find support and bounce in the high 61 range, another long entry opportunity would be on the first pullback from the bounce using the new low as a stop.
The next support region is the high 61 region cluster from .786 pullback at 61.96 and 1.236 corrective extension at 61.74.
If price does not bounce from these levels, a full retrace of the move from 59 becomes much more likely.
Monitoring price action around next support for another long entry. If price can find support and bounce in the high 61 range, another long entry opportunity would be on the first pullback from the bounce using the new low as a stop.