Zoom Video (ZM) zoomed higher in Monday’s after-hours trading session following the company's better-than-expected report -- and then faded in Tuesday trading.
Corny puns aside, Zoom Video stock was up a bit more than 1% at last check.
The company delivered a top- and bottom-line beat. Further, management’s outlook for next quarter and the full year was a little light vs. expectations but solid nonetheless.
Is the guidance weighing down Zoom Video stock after the earnings report? Could it be the overall selling pressure we’ve seen in tech and high growth stocks lately?
It’s likely a combination of both, as recent momentum — notice the slump in ARK Innovation ETF (ARKK) — isn’t holding. The outlook doesn’t seem to be enough to encourage bulls to buy the stock hand over fist.
Trading Zoom Video Stock
Chart courtesy of TrendSpider.com
Near the end of January, Zoom Video stock broke out over the key $70 to $72 zone. This $2 range has been notable support and resistance over the past five months.
About a month ago Zoom broke out over this level, then held it as support going into the earnings report. It also held this level in early trading Tuesday when the shares were down slightly.
We have a bull-flag consolidation now taking place, as Zoom Video stock tries to regain its 10-day and 21-day moving averages.
If it can do so, it puts $80-plus in play, and specifically the bulls will be looking for a potential rally back to the February high near $85.
Above that puts the 200-day moving average and weekly VWAP measure as the next target area, between $87 and $89. That’s roughly where the fourth-quarter high comes into play as well.
On the downside, it’s all about holding the $70 to $72 area as support. It’s worth mentioning that the 50-day moving average also comes into play in this zone.
Were the stock to go below it, the door might open down to the mid-$60s, where Zoom Video stock bottomed in December and found support through the fourth and first quarters.
