Zscaler (ZS) has rallied to reach our first price target of $305 from our Oct. 13 review and one Real Money subscriber is asking "what's next?'
Okay. Let's take a fresh look.
In the daily bar chart of ZS, below, we can see that things still seem in "good shape." Prices remain in an uptrend above the rising 50-day and 200-day moving average lines. ZS is not extended or overbought versus the 200-day line.
The daily On-Balance-Volume (OBV) line remains strong and the Moving Average Convergence Divergence (MACD) oscillator is still very positive.
In the weekly Japanese candlestick chart of ZS, below, we still see a bullish picture. No top reversal patterns. A rising market above the rising 40-week moving average line.
Bullish OBV line and MACD oscillator.
In this updated daily Point and Figure chart of ZS, below, we can see that the software is now projecting a tentative price target of $402.
Bottom-line strategy: Traders who are long ZS from our earlier recommendations should continue to hold longs. Raise stops to $270 from $250. The $402 area is our new price objective.
