• 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

Zscaler Looks Weak Ahead of Tuesday's Earnings

Here's what traders should do now.
By BRUCE KAMICH
Nov 29, 2021 | 03:36 PM EST
Stocks quotes in this article: ZS

Zscaler (ZS) is set to report their latest quarter numbers after the close of trading on Tuesday. We looked at ZS on October 22 when we wrote that "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."

In this updated daily bar chart of ZS, below, we can see that prices surged still higher in November but made a recent pullback. This retracement is not really damaging but it does get our attention. Prices are still trading above the rising 50-day moving average line and the rising 200-day moving average line. This is not what worries us.

The On-Balance-Volume (OBV) line has started to show some weakness and the 12-day price momentum study is showing lower highs as prices have made higher highs. This difference is called a bearish divergence and can foreshadow price weakness ahead.

In this weekly Japanese candlestick chart of ZS, below, we see a mostly positive picture. Prices are in a longer-term uptrend above the rising 40-week moving average line but the most recent candle is bearish (red). The weekly OBV line is still pointed up but the MACD oscillator has begun to narrow and that is the first hint that the strength of the uptrend could be wavering.

In this daily Point and Figure chart of ZS, below, we can see a potential downside price target in the $287 area.

Bottom line strategy: I have no special knowledge of what ZS is going to report for earnings but traders should reduce their long exposure and raise stops on any remaining longs to $330.

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: Investing | Stocks | Technical Analysis | Trading | Software & Services | Earnings Preview

More from Investing

The World Gets Worse as Inflation Gets Better?

Peter Tchir
Aug 9, 2022 12:50 PM EDT

Here's the shift in the narrative I expect over the coming days.

Bumble, Let's Just Be Friends for Now

Bruce Kamich
Aug 9, 2022 12:29 PM EDT

BMBL has a date with earnings on Wednesday, and the charts say investors should refrain from flirting with the stock.

The Bullish vs. Bearish Narrative on the Market

James "Rev Shark" DePorre
Aug 9, 2022 11:23 AM EDT

The CPI report Wednesday is going to cause a more careful examination of inflation, a hawkish Fed, and a potential recession.

I Don't Have Much of an Appetite for Red Robin Ahead of Earnings

Bruce Kamich
Aug 9, 2022 10:45 AM EDT

The restaurant chain reports quarterly numbers Wednesday.

Fight the Rally, or Fight the Fed?

Ed Ponsi
Aug 9, 2022 10:30 AM EDT

That's the big question facing market participants, and here is a key stock index point to watch to see which side to take -- plus a steelmaker trade to consider.

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

  • 09:24 AM EDT PETER TCHIR

    Jobs Report Reaction: Incredibly Strong, But Questions to Ask

    An incredibly strong July jobs report. Not only d...
  • 08:54 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The Secret to Dealing With FOMO
  • 03:51 PM EDT REAL MONEY

    AMD Second-Quarter Earnings Live Blog

    Real Money's Eric Jhonsa covers 's second-quarte...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 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