My Watchlist [27]: 17/12/23

Hi everyone, today I’ll look at one of the pandemic darlings:

Zoom Video Communications, Inc. (NASDAQ: ZM)

A look at the weekly chart shows that ZM is trading in a potential falling wedge reversal pattern, having declined from the pandemic highs of $500+. 2 weeks ago, the stock broke out of this pattern, and has spent the past week consolidating above this wedge, with substantial volume coming in above the breakout as it backtested the upper resistance trendline from above (resistance-to-support flip).

More importantly, I note that bullish divergence that has been forming, which suggests that a reversal has been brewing for several months.

I have nothing much to add for this setup. Even though the effects of the pandemic have largely subsided, there is still a place for ZM in the teleconferencing space in the coming years, but it will have to contend with competition from existing platforms such as Microsoft Teams.

Sentiment: BUY

Summary (with Price Targets - NFA):

• Falling wedge reversal setup with a measured move towards 100.14 (August 2022 high)

• The 75.91 level looks like a realistic near-term target, with multiple retests of that level over the past few weeks - the more times a resistance is touched, the more likely it is to break over time

• Accumulation of shares and long-dated options (i.e. > 2-3 months expiry) can take place around current levels

Keeping it short and sweet with this one. :)

$Zoom(ZM)$ $ARK Innovation ETF(ARKK)$ $Tesla Motors(TSLA)$ $Apple(AAPL)$ $SPDR S&P 500 ETF Trust(SPY)$

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