Zoom Hits Our First Downside Target ... What's Next?
by Mike Paulenoff
October 31, 2020 • 12:00 AM EDT
This past Tuesday afternoon, with Zoom Video Communications (ZM) at $539.50, Mike Paulenoff told MPTrader members:
"ZM followed a very technical price path into its October high at 588.54, which my work argues ended the up-leg from the August low at 230.75...The $64,000 question for me is whether or not ZM's correction will be completed in the 460-480 support zone, or slice through it towards 350-370? We will find out soon enough as we look for signals of downside exhaustion as ZM approaches the first downside support zone."
Starting the very next session (on Wednesday), ZM pivoted to the downside into a relentless decline, hitting a new reaction low at $457.02 late on Friday, prior to closing for the week at 460.91.
ZM's 15% ($82.48) plunge satisfied Mike's first downside target zone.
What's next for ZM? Is its recent weak price action merely a correction -- and a buying opportunity -- in a global pandemic that is experiencing a resurgence?
Or does the weakness reflect a potential shift in investor perceptions about the ability of the company to continue to benefit within a prolonged pandemic-challenged business environment?
Join Mike and his MPTrader community for their forthcoming analyses and discussions about ZM, in addition to many other stocks, ETFs, and indices.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
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More Top Calls From Mike
In his September 30th chart analysis for MPTrader members, Mike Paulenoff wrote bullishly about AMD, noting:
"AMD has piqued my interest technically because all of the price action off of its ATH at 122.38 (8/04) into the September lows at 99.51 (9/20) and 99.81 (9/29) has the right look of a complete, or nearly-completed correction of the prior major advance off of the 5/13 low at 72.50. As long as the 99.
MRNA's August downside reversal from a new all-time high (ATH) at 498.60 (8/10/21) to 349.00 (8/16/21) was just the first shot over the bow of a larger-developing corrective pattern and period.
Thus warned Mike Paulenoff to our members on the afternoon of August 16th, when, with MRNA trading at 363.
This past Monday, with Nike (NKE) poised to report earnings later in the week, Mike Paulenoff told MPTrader members that "NKE is vulnerable to a press into the 140-143 target zone either ahead of, or in reaction to, the earnings news."
NKE was trading at 161.75 at the time, and by the week's end the stock was 149.59, having hit a low of 148.
Back on August 18th, nearly two weeks ahead of ZM's (Zoom Video Communications) earnings report, Mike Paulenoff cautioned MPTrader members about the stock.
Mike wrote: "The price structure, which has pressed relentlessly lower (15%) since its 8/05 rally high at 404.35, is probing -- and trading below -- its 100 DMA, now at 345.67, and is considerably beneath its 200 DMA, now down-sloping at 367.20.
In our Top Call article a month ago, we told you about how Mike Paulenoff called AAPL's upside continuation, with the expectation that the stock could extend a little higher before upside exhaustion.
AAPL, indeed, went on to stair-step higher to reach a high of 157.26 high last week, overshooting the upper boundary of Mike's 153-156 projected high-zone by just 0.8%. It then proceeded to initiate the expected bout of weakness that accelerated to the downside this past Friday.
