• 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
    • Bruce Kamich
    • Doug Kass
    • 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
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Zscaler Stands to Weaken After Issuing Conservative Growth Outlook

The stock of the cloud security company isn't a long candidate at present.
By BRUCE KAMICH
Dec 02, 2022 | 08:17 AM EST
Stocks quotes in this article: ZS

Zscaler Inc. (ZS) is trading lower in premarket activity here on Friday on the heels of a disappointing growth forecast. In my last review of the cloud security company on Sept. 9 the picture was positive, but things changed, so let's check out the charts and indicators of Zscaler again.

 
In this updated daily bar chart of ZS, below, we can see that prices continued up but made a high on Sept. 10 and worked in three waves to a low in early November. Prices rallied toward the underside of the declining 50-day moving average line but failed. ZS trades below the bearish 50-day average line and below the bearish 200-day line. The trading volume shows us an uneven pattern that does not have follow-through strength. The On-Balance-Volume (OBV) line shows weakness from early September, telling us that sellers of ZS are more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
 
 
In this weekly Japanese candlestick chart of ZS, below, we see a mixed picture that could turn bearish when the latest weekly candle pattern is plotted. Prices are in a longer-term downward trend as they trade below the bearish 40-week moving average line. The most recent candle is a potentially bullish hammer pattern. I say potentially because there are two problems.. First, the pattern is not in a downtrend but rather in a sideways trend. Second, it is now unlikely that this week's candle will give us bullish confirmation of last week's hammer. The weekly OBV line has been flat the last four months and that does not help the bull case. The MACD oscillator is bearish.
 
 
In this daily Point and Figure of ZS, below, we can see a bullish price target. A trade at $121.25 is needed to turn this chart bearish.
 
 
In this second Point and Figure chart of ZS, below, we used weekly price data. Here the software projects a downside price target of just $86.
 
 
Bottom line strategy: Traders should avoid the long side of ZS. If prices break the early November lows we are likely to see further declines.
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 prohibited from trading individual securities.

TAGS: Earnings | Investing | Stocks | Technical Analysis | Cybersecurity | Software & Services | Real Money

More from Stocks

Fast Food Might Offer Investors a Quick Buck

Bob Lang
Feb 7, 2023 5:15 PM EST

Let's see how these restaurants may be settling into a profit sweet-spot amid inflation's ups and downs.

Giddy Market Gets Powell Happy

James "Rev Shark" DePorre
Feb 7, 2023 4:33 PM EST

The euphoric reaction to the Fed among investors makes little sense -- but adds to the market volatility.

When It Comes to Politics and ETFs, If You Can't Beat 'Em, Join 'Em

Mark Abssy
Feb 7, 2023 2:17 PM EST

Surprise! Lawmakers, no matter the party, are not exempt from insider-trading laws, just like the rest of us. But we can all invest in these two new exchange-traded funds.

Is FMC Corp Facing a Downward Correction?

Bruce Kamich
Feb 7, 2023 12:55 PM EST

Let's see what the charts look like.

It's Decision Time for Bulls and the Market

James "Rev Shark" DePorre
Feb 7, 2023 11:45 AM EST

The market is at a very important juncture.

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

  • 08:22 AM EST REAL MONEY

    LIVE EVENT: Bruce Kamich and Todd Campbell Share Their Stock Market Insights

    This Monday, Feb. 6 at 12 p.m., our very own exper...
  • 02:58 PM EST REAL MONEY

    Sarge Guilfoyle Breaks Down the Jobs Report, Fed Policy and Stocks!

    Watch it here!
  • 11:35 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Trading an Irrational Market
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 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