During Friday's Mad Money program Jim Cramer took a look at some of the companies that are reporting earnings this week. On Tuesday, we get earnings from Zoom Video Communications Inc. (ZM) , one of the red-hot stocks that are thriving in our stay-at-home economy.
Let's check out the charts of ZM and see if we can launch a technical strategy.
In the daily bar chart of ZM, below, we can see that the stock more than doubled from the October-January base pattern around $70. Prices are above the rising 200-day moving average line and above the rising 50-day moving average line. The 50-day line has been acting as support and buyers have shown up every time it has been tested in the past two months.
The trading volume has been more active since March and tells you that traders and investors have been attracted to the stock. The daily On-Balance-Volume (OBV) line moved up to a high in late March telling us that buyers were acting very aggressively but it has diverged bearishly from the price action since that high. The OBV line has moved sideways as prices have continued to climb. The price action could ignore this bearish divergence.
The trend-following Moving Average Convergence Divergence (MACD) oscillator turned bullish in January and made a peak so far at the end of March. The movement of the MACD oscillator is also diverging from the price action, but again this may be ignored by traders and investors.