Zoom Video Communications (NASDAQ:), one of the tech industry's darlings, whose stocks were boosted by the work-from-home environment created by the COVID-19 pandemic, will announce business results today after the market close. Analysts expect earnings per share of $1.16 on revenue of $991.21 million.
If this comes out, it means that the video-first communication platform has outperformed last year. Then Zoom became a household name, at the height of the pandemic.
Still, whether today's report will live up to expectations, or perhaps even beat it, the tech chart shows the stock is moving down.
The price has developed a bullish flag, bearish after plunge of nearly 18% in just two weeks, before August 15 and August 19.
That dive not only formed the flagpole, but also the right side of a double top. In addition, the recent tumble caused a Death Cross.
While the 50 DMA is shown as support for the low of the double top, the 100 DMA reveals the pressure point of the rising flag. A downward breakout will verify the double top and complete the flag. rally that tests and confirms the flag's resistance.
Moderate traders would also wait for the same move, the downward penetration and the return move, for a better entry, if not confirmation.
Aggressive traders could now go short, provided they understand the higher risk associated with moving to the rest of the market.
Trade sample
Admission: $347
Stop Loss: $350
Risk: $3
Goal: $320
Reward: $27
Risk: Reward Ratio: 1:9
