Cloud computing and cybersecurity company Zscaler (ZS) had a very long period of relative strength between May of 2023 and February of 2024. Over that period, ZS climbed from the bottom of the red zone to the top of the green zone in the SIA NASDAQ 100 Index Report.
In recent weeks, however, Zscalerās relative strength has eroded. Last month it fell into the yellow zone and this week it has returned to the Red Unfavored Zone for the first time since August. Since leaving the green zone, the shares are down 8.4%, while the NASDAQ Composite Index is down 0.6% over the same time frame.
Yesterday ZS finished in 56th place, down 2 spots on the day and down 51 positions in the last month. Zscaler (ZS) has peaked and come under renewed distribution in the last month. The previous uptrend peaked just short of $260.00 in February and since then, we have had a weekly doji candle which suggested bulls were losing strength and four weekly red candles, which, along with the snapping of two uptrend lines, indicated the bears had taken control of the market.
More recently, the shares have fallen and remained below $200.00 with round number support reversing polarity to become new resistance, a sign of ongoing selling pressure. Next potential downside support appears near $160.00, a previous breakout point, and then the $150.00 round number.
Last May, a major downtrend in Zscaler (ZS) bottomed out and the shares then spent the next nine months recovering lost ground, mainly through two big rallies in May-June and November-February. The shares encountered resistance just below $260.00, and since then, have come under distribution, starting a downtrend of lower highs, completing a bearish Double Bottom pattern and falling back under the $200.00 level.
Potential downside support tests appear near $181.20 based on previous column highs/lows, $167.40 based on a horizontal count, and the $150.00 round number. Initial resistance appears near $212.30 based on a 3-box reversal.
With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 5 out of 10, ZS is exhibiting short-term weakness against the asset classes.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
