When I first highlighted this stock in March it was trading under $50.
Now it’s trading near $70, and it looks ready to move big again.
It doesn’t appear to be concerned about the trade issues with China as it hasn’t sold off with the market decline.
Here’s how to trade its next move higher.
There are 3 patterns to take note of in the chart of Zscaler (ZS) below.
First, it is sitting on its 50-day moving average, which has demonstrated its support several times.
It’s also been consolidating for a month right on top of the early March gap higher from its earnings announcement.
Finally, while the market has retreated over the last week, it has held up. In fact, yesterday it traded over the prior day’s high.
All this suggests that it is eager to move higher.
However, if the markets continue to slide under their 50-day moving averages it will be prudent to wait to enter new positions until the markets show signs of turning higher.
The trade setup in ZS is to be a buyer of the breakout over $70 with a stop under $64.50.
Additionally, the markets should be showing signs of strength such as trading over a prior day’s high.
Be patient and keep ZS on the top of your watch list.
Rick Nartarian, Chief Investment Officer
The American Investor Daily