ZEN dominated by bears dragging the market lower throughout the day
Zendesk Inc. (ZEN) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
ZEN finished the month 2.96% higher at 91.15 after tanking $9.37 (-9.32%) today on high volume, notably underperforming the S&P 500 (0.77%) following Thursday's earnings report. This is the biggest single-day loss in over four months. The bears were in full control today, moving the market lower throughout the whole session.
Daily Candlestick Chart (ZEN as at Jul 31, 2020):
ZEN reported earnings of $0.14 per share after Thursday's market close. With analysts having expected an EPS of $0.1, Zendesk Inc. beat market expectations by 40.0%. The company's last earnings report was released on April 30, 2020, when Zendesk Inc. reported earnings of $0.1 per share beating market expectations by 66.7%.
Friday's trading range has been $8.62 (8.85%), that's far above the last trading month's daily average range of $3.67. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ZEN.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 89.10 earlier during the day, the share bounced off the key technical support level at 89.44 (S1). The failure to close below the support might increase that levels importance as support going forward. The stock closed back below the 20-day moving average at 92.89 for the first time since July 16th. When this moving average was crossed below the last time on July 16th, ZEN actually gained 2.74% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 92.89.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Zendesk. Out of 59 times, ZEN closed higher 59.32% 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 66.10% with an average market move of 1.22%.