Zoom (ZM) has quickly become a new noun and verb in American conversation. Our stay-at-home economy and education system could not operate without it.
We reviewed the charts on Sept. 9 of Zoom Communications Inc. and wrote that "ZM looks like it will resume its impressive rally. Aggressive traders could buy available weakness risking a close below $300." Prices rallied to new highs after our review but a fresh look at the charts is a good idea at this juncture.
In this updated daily Japanese candlestick chart of ZM, below, we can see some new clues. Upper shadows above $510 tell us that traders are rejecting those highs. In recent days the candle patterns are small spinning tops, which suggests a balance between bulls and bears.
A close below $460 could tip the scales to the bear side. The On-Balance-Volume (OBV) line shows a peak in late September and a slight decline -- this could be some subtle selling. The 12-day price momentum study shows weaker momentum readings from September into October.
In this weekly Japanese candlestick chart of ZM, below, we can see two red candles, which could be 2/3 of a "three black crow" pattern. This could mark a top reversal. The weekly OBV line shows a recent dip and the 12-week price momentum study has leveled off.
In this daily Point and Figure chart, below, we can see that a trade at $460 could weaken this chart.