ZM - 3D timeframe hints at potential MACRO shiftHi guys, this is a Technical Analysis on Zoom.
So many stocks have done well in this bull market and some not so much. My focus is to catch some potential ones that are down significantly from their blow off tops, in the process of bottoming.
Note this is a 3 Day timeframe. This analysis is to see hints in these intermediate timeframes to see whether there is potential for these findings to impact the bigger picture or MACRO trend.
Current Price action for the last 4 candles have printed support above the 50 DMA (green moving average) and 21 EMA (Yellow moving average)
Note also the 50 Green DMA is starting to flatten out, indicating a potential BOTTOMING sign, since if you look left the things been signficantly pointed down since blow off top.
Also note the 21 Yellow EMA is starting to slope up, trying to cross over the 50 DMA.
This has happened only 1 time in the history of 3D Zoom chart but when it did, a massive bull run ensued after. This is something to OBSERVE.
ANother plus point, we are above the 2 sloping trend lines that were resistance lines since July 2022 and Nov 2022.
NOw lets look at the CANDLE characteristics of the 4.
Its important to notice the UPPER WICKS forming -> this indicates selling pressure, and that we are hitting on some tough resistance, indicated by the RED rectangle.
BUT note the highlighted candle formation -> This is a Dragonfly doji, which is a BULLISH candle pattern. I wont go into the details as i am not an expert but just note its not a traditional dragonfly so the power of its impact, may vary. (Again i could be wrong, so don't hold me to this and correct me if im wrong)
Note the tail of the Doji, how it bounced off this major convergence of support between the July 2022 resistance line, and both MA. Great sign in my opinion for a bullish case.
BUT also keep your mind on the various support lines below price action, if we get rejected here which is always a possibility, look for price to test:
1. Firstly the moving averages
2. The July 2022 resistance now flipped support
3. November 2022 resistance now flipped support
4. Lastly, the RED horizontal MAJOR bottom support at around $61. WHich we have never gone below in the history of ZOOM.
Lets move onto my indicators:
1. RSI- Note the Red line, this is actually a reference to the BULLISH DIVERGENCE forming in zoom. Notice also the first white horizontal line, We have recently broken major resistance and formed a higher high in RSI. This is a good sign in my opinion. The 2nd white line above, is something that if we break would indicate MAJOR trend change, as we would break the June 2021 highs on RSI.
2. MACD -> momentum indicator -> Notice how the histogram bars have shortened and the Blue/Red lines have flattened. This in my opinion, this "quiteness", may indicate a "Calm before the storm" scenario. Also if we are crossed up where the Blue line is over the red and ABOVE the 0 level, that could be a sign for bullish momentum. Especially if the space between the 2 lines widens.
3. ADX & DI - Notice the green line is slowly moving above the White horizontal line, if we can get significantly above it, its may indicate a chance for further bullish momentum. If also the white line comes up and pierces the green line, that would add to the bullish momentum case.
*BULLISH DIVERGENCE is a bullish pattern where price action on the charts shows lower lowers but the indicators show higher lows. This pushes price to "catch up" with what the indicators are showing, since normally price action should mirror indicators & vice versa.
CONCLUSION:
Price action is currently in an interesting zone of resistance. Getting above this would be monumental for ZM for sure. We have some great support levels hanging out below us, which could make for some nice BUY zones if price gets there. But in the great scheme of things, and in my opinion, NOT Financial advise -> Zoom is extremely cheap. There are some bullish signs like the dragonfly doji, potential EMA/DMA cross, Higher high RSI and more...... COuld these be the necessary catalysts to have zoom finally start a bull run, well....... TIME WILL TELL.
THANK YOU for taking the time to tune in. Please support me by boosting, following and commenting. Feedback always helps and or expressing your thoughts would be great.
DISCLAIMER: This is NOT FINANCIAL ADVISE. I am not a financial advisor. This is strictly my opinion and for educational expression. Trade with caution, always focusing on RISK MANAGEMENT. Protect yourselfs, deploy stop losses.
