While meme stocks dominated the financial press over the last few weeks, an old favorite came back to life under the radar.
Zoom Video Inc Daily chart
As the world fixated on GameStop (NYSE:GME) and Amazon (NASDAQ:AMZN), Zoom Video (NASDAQ:ZM) quietly went about its business, reclaiming the all-important $400 support level. This was a major technical achievement and back in mid-January I told readers to be on the lookout for it:
ZM needs to get above $380 resistance to break the larger downtrend….and this will be a lot more interesting if it gets back above old support at $400.
Now I’ll be honest, I was pretty hard on the stock back in early January because its price action was absolutely dreadful. But as opportunistic traders, no matter what we think, we need to keep an open mind when the evidence changes.
Rather than extend the selloff, ZM found a floor and actually started challenging $400 resistance not long after I wrote my last post.
I was skeptical about this bounce at first. But as I wrote in January, getting above $380 broke the downtrend and things really started looking good once it reclaimed $400 last week.
If a person was short, there have been plenty of clear and obvious signals to cover and lock-in those nice profits. And for the patient dip buyer, clearing $400 last week gave us a very sensible entry with a low-risk stop-loss just under this level.
Will this bounce stick and turn into a larger recovery? I don’t know. But as long as this stock remains above $400, it deserves the benefit of doubt.Leave a comment