• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Zendesk and the Art of Investor Patience

Zendesk's stock has been on a tear. But there may still be some room for growth in the weeks ahead for the high-flying customer service software company.
By BRUCE KAMICH
Feb 26, 2019 | 12:16 PM EST
Stocks quotes in this article: CRM, WDAY, ZEN

In the"No-Huddle Offense" segment of Mad Money Monday night, Jim Cramer reminded viewers that the "fear of missing out," or FOMO, should never be an investing strategy because it's always hazardous to your portfolio. By the time you've heard about a hot stock, the easy money has often already been made. Basically, you simply can't catch them all.

That is the case with enterprise-software company Zendesk Inc. (ZEN)  said Cramer, which has seen its shares rally more than 780% since its IPO way back in 2014. Cramer said while Zendesk is a great company with a great story, investors should not chase the stock at these levels. The company is now competing head to head with the likes of Action Alerts PLUS holding Salesforce.com (CRM) and Workday (WDAY) , yet ZEN trades for a premium by comparison.

Let's take a few minutes to look at the charts and indicators.

In the daily bar chart, below, we can see how ZEN outperformed in recent months versus the broad market. ZEN declined from October, but made its low in November and not December. ZEN made a higher low in December, and this month, it has broken out to new all-time highs.

ZEN is above the rising 50-day moving average line and the rising 200-day average line. At the beginning of February, the 50-day line on ZEN moved above the slower-to-react, 200-day line for a bullish "golden-cross" buy signal.

The volume of trading has increased since November and tells us that investors in ZEN have become more and more interested. The daily On-Balance-Volume (OBV) line has trended significantly higher from November, telling us buyers of ZEN have been very aggressive.

The trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in December for an outright go-long signal. The MACD oscillator stalled recently to mirror the price action.

In the weekly bar chart of ZEN, below, we can see part of the outsized gains Cramer noted last night. Despite a four-fold gain in the past three years, the chart is still bullish. Prices are above the rising 40-week moving average line.

The weekly OBV line has made a new high for the move up to confirm the move, and the weekly MACD oscillator is in a bullish configuration above the zero line after a buy signal last month.

In this Point and Figure chart of ZEN, below, we can see a relatively nearby price target of $87.34.

Bottom-line strategy:  Investors in ZEN have done very well. Prices are still pointed up, and I see none of the warning signs that typically precede a top. My next targets are $87 and then $95. Risk a close below $72 for now.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

Action Alerts PLUS, which Cramer manages as a charitable trust, is long CRM.

TAGS: Investing | Stocks | Technical Analysis | Trading | Software & Services | Technology

More from Stocks

Bearish Bets: 2 Nasdaq Stocks You Should Consider Shorting This Week

Bob Lang
Jan 17, 2021 12:05 PM EST

These names are displaying technical deterioration.

KushCo Sprinkles Some Gems on Its Earnings Call

Debra Borchardt
Jan 17, 2021 8:15 AM EST

The cannabis packaging company is looking at Arizona and New Jersey as new markets for growth.

When it Comes Time to Sell, Will You Act or Will You Freeze?

James "Rev Shark" DePorre
Jan 16, 2021 10:00 AM EST

Why don't more people embrace the ease and power of selling stocks? Why do they freeze and do nothing as losses build?

Hungry Traders and Stock Opportunities Aren't Likely to Go Away Soon

James "Rev Shark" DePorre
Jan 15, 2021 4:40 PM EST

It doesn't take much time for stocks with strong momentum to reset and continue on their way.

At What Price Is Ballard Power Systems a Buy?

Bruce Kamich
Jan 15, 2021 3:09 PM EST

Let's check out the latest charts of BLDP.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    When it's time to sell, will you act or freeze?
  • 08:35 AM EST GARY BERMAN

    Wednesday Morning Fibocall for 1/13/2021

    Lower highs... SPX (Long-Term View) The 1/8/2...
  • 08:07 AM EST GARY BERMAN

    Tuesday Morning Fibocall for 1/12/2021

    Watch if the recent trend of lower highs continues...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login