Shares of Zscaler Inc. (ZS) have been on the march, alongside other peers in the cybersecurity space. Earlier this month, SIA highlighted shares of CrowdStrike, Palantir, Broadcom, and Fortinet as a cluster of names that have moved up in unison into the favored zone of the SIA NASDAQ 100 Index Report. Zscalerāa cloud-based cybersecurity company that helps organizations securely connect users to applications and dataāis now being highlighted as a name that continues to improve technically. Its Zero Trust Exchange platform replaces traditional network security appliances with a cloud-native solution that inspects traffic in real time and enforces least-privilege access, significantly reducing risk in todayās hybrid work environments.
Shares of ZS moved into the favored zone on April 7 as a newcomer to the SIA Report and continue to climb, currently sitting at position #8. Having recently brushed up against resistance at the $250 level, the attached monthly candlestick chart provides an interesting lens to visualize the strength that buyers are exhibiting. The last two months of trading show tall bullish green candles with very little upper wick, suggesting that demand may be in control. Should sellers gain the upper hand, the lower green line at $170 could act as support. However, if current trends prevail, the upper zone around $370 might become the next major resistance level to watch.
Next, we turn to the Point and Figure (P&F) chart, where SIA has plotted three upper resistance levels and three supportive levels. The P&F chart has yet to confirm a breakout, which may require a move beyond $258.78. While todayās trading has reached the $257 range, it remains just below the breakout threshold. As such, risk-reward parameters may still be a challenge, given the proximity to the top of the current trading range. Support levels appear at $234.39, $216.54, and lower still at $174.15. On the upside, should a breakout occur, new P&F resistance levels are plotted (red lines) at $291.43 and $369.60.
All of this plays out against the backdrop of a strong SIA relative strength reading for Zscalerāranking high compared to other stocks in the SIA NASDAQ 100 Index Reportāand earning a perfect 10 out of 10 score when compared to the five other major asset classes.
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