Video conference treasure Zoom (NASDAQ 🙂 fell to $ 15.57 or 5.6% on Monday, one of the largest sales in percent since the 6.4% decline on April 24, when Facebook (NASDAQ 🙂 launched a competitive service for free video calls for up to 50 participants.
It was also the biggest drop in dollars since March 24, when President Donald Trump suggested he ask for the lockdown restrictions to be lifted. was a technological light in the closed darkness, but dimmed with the prospect of reopening the doors of the vast American economy.
This is why yesterday's sale seems so out of place when the resurgence in cases of COVID-19 in the United States calls for tightening social distance guidelines and puts the possibility of renewed lockdowns on the table. The prospect of more people staying at home would only add to the value of access for others that Zoom offers. the portfolios of investors who threw them overboard when a financial storm shocked the financial vessel. So far this year, Zoom shares have risen nearly 300%, compared to a 16% gain overall.
Jim Cramer of Mad Money considers this reversal as a buying opportunity. He is targeting long-term holders and recommends starting small as yesterday's sale is likely to be contagious and will cause more sales today.
We agree and we have the map to prove it.
Monday's sale pushed the price below the uptrend since May 27, confirming the shooting star's resistance on June 6.
Yesterday's candle developed a powerful bearish flooding pattern that enveloped for 7 trading days
Note how the volume, which supported the price from February 3 to March 5, remained flat until April 8 and from then on steadily declined. The volume echoed in the price direction until June, but then diverged as shares rose from the May 27 gavel. The drop in volume showed that the price increase was the work of fewer and fewer traders. When the demand dries up, and only the supply remains, the price falls.
The short MA of the MACD fell below the long MA, as prices weakened.
The ROC shows that momentum moves in reverse to the price. The volume falls below the upward trend line corresponding to the upward trend line in the price running since January, with a target of $ 180, based on the current angle.
Meanwhile, RSI, a less sensitive momentum indicator, has yet to fall below its upward trend and has come true. All in all, while we believe in the value of the stock in the long run, as we foresee more severe economic constraints due to COVID-19, we still expect a corrective dip due to profit-taking. In addition, any progress in controlling the spread of the coronavirus can depress the price.
Trading Strategies
Conservative traders have to wait for a relapse to find support, perhaps at the USD 180 level.
Moderate traders can start accumulating at the USD level 200.
Aggressive traders risk a short position, counting on momentum, provided they understand the risk of swimming against the current.
Trade Example – Aggressive Short
Admission: $ 272 – during a rally to retest a powerful bearish pattern engulf pattern
Stop-Loss: $ 282 – above yesterday's high
Risk: $ 10
Target: $ 222 – June highs
Reward: $ 50
Risk-reward ratio: 1: 5
Note: This is a trade monster, not a gospel. It is designed to easily demonstrate the relevant parameters of a coherent trading plan. It is not the content of the article. Feel free to adjust these parameters to suit your budget, timing and temperament – provided you understand all moving parts and are willing and able to take the risk.
