Technical Analysis – Could Zoom stock resume its rally during the vaccination campaign?

Christina Parthenidou, XM Investment Research Desk

Zoom video’s stock seemed poised to start a downtrend after finalizing a bearish head and shoulder pattern below the neckline and the 380.00 level at the end of December. The bearish cycle, however, did not last long, and the price is currently set to dismiss the negative trend warning, recouping its lost ground above that line.

A close above the Ichimoku cloud and the 440.00 number, which is slightly above the 38.2% Fibonacci mark of the October downfall, could raise buying interest, likely sending the price up to December’s peak of 484.45. Beyond that, the bulls may head for the 540.00 resistance area.

Still, with the Stochastics hovering within the overbought zone and the RSI approaching its 70 level, some caution should be warranted. The bears are expected to come into play if the price retreats below the 392.80 – 365.00 region, while a step below the 200-day SMA at 339.88 would resume fears of a down-trending market.

Summarizing, Zoom’s stock is trying to correct the bearish trend formation, which signaled the end of the impressive rally in December. A decisive run above the cloud could add credibility to the recovery mission.