ZS closes within previous day's range after lackluster session
Zscaler Inc. (ZS) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
ZS finished Thursday at 60.55 gaining $1.42 (2.4%), strongly underperforming the S&P 500 (6.24%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (ZS as at Mar 26, 2020):
Thursday's trading range has been $2.56 (4.25%), that's far below the last trading month's daily average range of $4.52. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for ZS.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Zscaler managed to close back above the 200-day moving average at 59.09. When this moving average was crossed above the last time on Tuesday, ZS actually lost -4.84% on the following trading day. Prices are trading close to the key technical resistance level at 62.69 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 58.01 where further sell stops could get triggered.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Zscaler. Out of 126 times, ZS closed higher 50.79% 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 61.11% with an average market move of 3.62%.