Market Update: After yesterday’s historic rally, the futures this morning point to a slightly positive but relatively flat opening.
This is after Congress and the Administration announced that they had reached a deal for a coronavirus relief package. We believe the markets are still showing that there is a great deal of uncertainty with the impact of the virus on the economy.
Even after yesterday’s increase in the market, we are still firmly in a bear market as the major indexes are still far below their previous highs.
Now, even though we are still in a bear market, the market could turn quickly just as it did yesterday.
To protect ourselves from these whipsaws we like to have a few hedges in our Powertrend portfolio . So today’s chart will be for a stock that has remained bullish despite the selloff.
Today’s Chart of the Day stock has been one that has acted as a hideout for the bulls amidst this bear market.
Yesterday, we looked at a Daily Price Chart of Chevron Corp. and noted that the stock had been making a series of 52-Week Lows.
Today’s Chart is for Zoom Video Communications, Inc. (NYSE: ZM).
Zoom Video Communications, Inc. provides a video-first communications platform that changes how people interact primarily in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It connects people through frictionless video, voice, chat, and content sharing. The company’s cloud-native platform enables face-to-face video experiences and connects users across various devices and locations in a single meeting.
The Daily Price Chart below shows that ZM has traded in a clear bullish pattern of higher highs and higher lows since late January.
Track the Price Chart from lower left to the upper right…
This bullish trading pattern points to a further advance.
You see, typically stocks that make a series of two or more higher highs and higher lows reliably continue on in an upward trend.
But it’s important to note that strong stock rallies have pullbacks along the way.
These pullbacks present a buying opportunity for us – the kind we hunt for in PowerTrend Options.
Purchasing ZM after a 3 to 5% price pullback has provided a good entry point for the stock this year, and has produced a healthy return.
We’ll keep watching ZM as it tops its previous highs and waiting for price pullbacks.
Editor, Chart Of The Day