We recommended purchase of Zoom Video Communications ( ZM) on May 23 ahead of its earnings report, and here on Tuesday a sell side firm raised its fundamental outlook to outperform with a $121 price target. 
Let's go back to Zoom's charts again.
In this daily bar chart of ZM, below, we can see that prices have rallied above the declining 50-day moving average line. Trading volume increased sharply and the On-Balance-Volume (OBV) line has started to turn to the upside. The Moving Average Convergence Divergence (MACD) oscillator has edged closer to the underside of the zero line and is now closer to generating an outright buy signal.
In this weekly Japanese candlestick chart of ZM, below, we can now see a bottom reversal pattern. Candlesticks can quickly spot a reversal but they do not generate price targets. ZM is below the declining 40-week moving average line. The weekly OBV line shows a long decline and now a slight improvement. The MACD oscillator is improving but is a long way from a buy signal.
In this daily Point and Figure chart of ZM, below, we can see a potential upside price target in the $158 area.
In this weekly Point and Figure chart of ZM, below, we can see that prices reached and exceeded a downside price target of $257. A trade at $128 may improve the chart.
Bottom line strategy: I stand by my May 23 recommendation for ZM: "I have no special knowledge of what ZM will/could report to shareholders and analysts, but prices are both extended on the downside with a five-month bullish divergence versus the momentum indicator. Aggressive traders could probe the long side of ZM ahead of earnings. This is just a bounce trade as ZM has not formed a new base pattern. Use a reasonable sell stop like $75 and look for a rebound into the $125-$150 area."
Traders who bought ZM could raise stops to $90 from $75. Our price target is now the $125-$158 area.
