In his second "Executive Decision" segment Friday on Mad Money, Jim Cramer sat down with Jay Chaudhry, chairman and CEO of Zscaler, Inc. (ZS) , the cloud security platform which just reported a four-cent-a-share earnings beat with a 61% rise in revenues. Shares fell nearly 6% amidst the market's broader selloff Friday and are weaker again today.
In this daily bar chart of ZS, below, we can see how prices have rallied from their November nadir. Prices recently closed below the cresting 50-day moving average line.The $65-$60 area looks like it could provide some support. The 200-day line is below the market with a positive slope.
The daily turnover looks like it has increased since early March, while the On-Balance-Volume (OBV) line looks like it has struggled to move higher, suggesting more of a balance with aggressive buying and aggressive selling.
The Moving Average Convergence Divergence (MACD) oscillator has turned lower for a take profits sell signal.
In this limited weekly bar chart of ZS, below, we can see that prices are above the rising 40-week moving average line.
The weekly OBV line shows what could be the beginning of a downtrend and the weekly MACD oscillator has narrowed towards a possible bearish crossover.
In this point and figure chart of ZS, below, we can see that prices have reached a downside price target, and there looks like a zone of support below the current level.
That is not a good reason to buy or to go long, in my opinion.
Bottom line strategy: While the fundamentals of ZS sound interesting, the charts have begun to weaken. I would suggest putting ZS on your potential shopping list for now, but let's see how things develop.