Are the Bulls Logging Off Zoom Video?
Zoom Video Communications has staggered since last year’s massive rally. Now it’s making a lower high and may be at risk of further downside.
Notice how ZM attempted to rebound above $450 this week but was quickly rejected. That’s important because it matches the high-volume bearish gap from November 9 – the same day positive vaccine news changed the narrative on coronavirus.
Second, the current price zone is near the 100-day simple moving average (SMA). That line recently turned negative as well, suggesting the longer-term momentum has turned bearish. (See our MA speed script, featured in this chart.)
Third, stochastics are retreating from an oversold condition.
It’s interesting that ZM reported super-strong results on November 30 but still crashed. Will that precedent repeat with the next set of numbers due on March 1?
ZM trades for more than 60x revenue and about 290x earnings. That makes a famously rich stock like Salesforce.com (11x and 64x) look cheap.
Valuations could be important now as interest rates shoot higher and investors rotate back to lower-multiple financials and industrials. Covid cases are also down about 75 percent in the last month. The new backdrop may prove increasingly difficult for ZM.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Notice how ZM attempted to rebound above $450 this week but was quickly rejected. That’s important because it matches the high-volume bearish gap from November 9 – the same day positive vaccine news changed the narrative on coronavirus.
Second, the current price zone is near the 100-day simple moving average (SMA). That line recently turned negative as well, suggesting the longer-term momentum has turned bearish. (See our MA speed script, featured in this chart.)
Third, stochastics are retreating from an oversold condition.
It’s interesting that ZM reported super-strong results on November 30 but still crashed. Will that precedent repeat with the next set of numbers due on March 1?
ZM trades for more than 60x revenue and about 290x earnings. That makes a famously rich stock like Salesforce.com (11x and 64x) look cheap.
Valuations could be important now as interest rates shoot higher and investors rotate back to lower-multiple financials and industrials. Covid cases are also down about 75 percent in the last month. The new backdrop may prove increasingly difficult for ZM.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
