ZEN breaks back above 200-day moving average
Zendesk Inc. (ZEN) Technical Analysis Report for Aug 13, 2019 | by Techniquant Editorial Team
ZEN finished Tuesday at 78.06 gaining $3.67 (4.93%), notably outperforming the S&P 500 (1.51%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Monday's high at 76.00, Zendesk confirmed its breakout through the prior session high after trading up to $2.87 above it intraday.
Daily Candlestick Chart (ZEN as at Aug 13, 2019):
Tuesday's trading range has been $4.97 (6.72%), that's far above the last trading month's daily average range of $2.84. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for ZEN. Prices continued to consolidate within a tight trading range between 73.65 and 78.87 where it has been caught now for the whole last trading week.
Regardless of a weak opening the share managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on July 30th, ZEN actually lost -10.27% on the following trading day.
The market managed to close back above the 200-day moving average at 75.60. Unable to break through the key technical resistance level at 78.43 (R1), the stock closed below it after spiking up to 78.87 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 73.65 in the prior session, ZEN found buyers again around the same price level today at 73.90.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 78.87 where further buy stops could get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for Zendesk. Out of 33 times, ZEN closed higher 66.67% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 60.61% with an average market move of 1.39%.