ZEN closes within previous day's range
Zendesk Inc. (ZEN) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
ZEN finished the week 9.9% higher at 81.93 after gaining $1.75 (2.18%) today, strongly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 81.93 marks the highest recorded closing price since February 26th. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ZEN as at May 22, 2020):
Friday's trading range has been $2.65 (3.3%), that's slightly below the last trading month's daily average range of $3.17. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for ZEN.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. The last time this happened on March 17th, ZEN actually lost -3.32% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 79.60 earlier during the day, the stock bounced off the key technical support level at 79.85 (S1). The failure to close below the support could increase that levels significance as support going forward. The share ran into sellers again today around 82.25 for the third trading day in a row after having found sellers at 82.24 in the previous session and at 81.80 two days ago.
Crossing above the upper Bollinger Band for the first time since Wednesday, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 76.14 or signal the beginning of a strong momentum breakout leading to even higher prices.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Outside Bar" stand out. Its common bullish interpretation has been confirmed for Zendesk. Out of 66 times, ZEN closed higher 57.58% 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 1.81%.