Zoom Video Communications (ZM) remains near the top of the Green Favored Zone in the SIA NASDAQ 100 Index, continuing to hold down 2nd place with a 4.1% gain yesterday.
This is a classic example of how resistance levels can reverse polarity and become support levels following a breakout. Earlier this month, Zoom Video Communications broke through the $500 round number to complete a bullish Ascending Triangle pattern and signal the start of a new upleg. After encountering resistance near $590, the shares dropped back but successfully retested $500 as new support and yesterday they turned upward once again, confirming the breakout and that the longer-term uptrend remains intact.
With $500 having been established as initial support, initial resistance appears at the previous high near $590, then the $650-680 zone based on measured moves.
Earlier this month, Zoom Video Communications (ZM) staged a major breakout, breaking through the $500 round number and completing a bullish Triple Top pattern. More recently, the shares have gone into sideways consolidation mode, staging a 4-box correction, but holding above their previous breakout point.
It would take a move up through $548 to complete a 3-box reversal to the upside and start a new X column. Potential upside resistance points on trend appear at the previous high near $570, then $630 ad $710 based on horizontal/vertical counts. The $495 to $505 area around the $500 round number and breakout point has become initial support.
With a perfect SMAX score of 10, ZM is exhibiting near-term strength against the asset classes.
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