Zscaler Stock Jumps 7.22% To $313.89 On Bullish Technical Breakout

Zscaler (ZS) exhibited significant price action in the most recent session, surging 7.22% to close at $313.89 on elevated volume of 2.12 million shares, breaking above key technical levels. The following technical analysis integrates multiple perspectives to assess the stock’s trajectory, highlighting confluence and divergences where applicable.
Candlestick Theory
The latest session formed a robust bullish engulfing pattern, with the price range ($294.92–$315) completely overshadowing the previous day’s bearish candle. This signals strong buying momentum after a brief consolidation near the $290–$295 support zone, which has now been validated as a critical demand area. Resistance is evident near the psychological $315 level, aligning with the year-to-date high. A sustained close above $315 could trigger further upside, while failure to hold $295 may indicate short-term vulnerability.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages remain positively aligned, confirming a long-term uptrend. The 50-day MA (approximately $290) provided dynamic support during the recent pullback, with the price rebounding sharply. The 200-day MA (near $260) continues to rise, underscoring the structural bullish bias. The golden cross (50-day above 200-day) established earlier this year remains intact, though the 100-day MA ($280) warrants monitoring for any trend weakness.
MACD & KDJ Indicators
The MACD histogram has shifted to positive territory following the recent surge, with the signal line crossover suggesting renewed upward momentum. KDJ metrics show the %K line crossing above %D from oversold territory (<30), supporting a short-term bullish reversal. However, the KDJ’s rapid ascent toward overbought levels (>80) may indicate near-term exhaustion risk, requiring confirmation from other indicators.
Bollinger Bands
Price volatility expanded significantly as the stock breached the upper Bollinger Band ($310) during the latest rally, ending the preceding period of band contraction. This breakout suggests accelerating momentum, though a close outside the upper band often precedes short-term consolidation. The 20-day moving average ($298) now serves as immediate support, with a close below this level potentially signaling a false breakout.
Volume-Price Relationship
Volume surged 18.8% during the bullish breakout, confirming buyer conviction. Notably, distribution phases (e.g., the decline on October 7) occurred on relatively lower volume, suggesting weak selling pressure. The volume-weighted average price (VWAP) since the August low ($272.50) resides near $295, reinforcing this as a high-confidence support zone. Sustained volume above the 30-day average would bolster the current uptrend’s legitimacy.
Relative Strength Index (RSI)
The 14-day RSI has rebounded from neutral territory (45) to 62, escaping oversold risks but not yet overbought. While momentum is improving, the lack of divergence during recent lows adds credence to the bullish reversal. Traders should note that RSI values between 60–70 have historically preceded consolidation during this stock’s uptrend, warranting caution despite no immediate overbought signal.
Fibonacci Retracement
Using the swing low of $272.50 (August 7) and the swing high of $315 (October 8), key Fibonacci levels are identified. The recent pullback to $294.92 aligned precisely with the 50% retracement level ($293.75), where buyers emerged aggressively. This confluence with the 50-day MA and VWAP solidifies $293–$295 as a major support band. Upside targets now include the 127.2% extension level near $335, though the 100% level ($315) must be convincingly breached first.
Confluence and Divergence Observations
Significant confluence exists at $295, where Fibonacci, moving average, volume-based support, and candlestick reversal signals converge. The MACD and KDJ simultaneously generated bullish crossovers, corroborating the volume-backed price surge. However, a minor divergence emerged as Bollinger Bands signaled over-extension while RSI remained neutral—a nuance suggesting near-term consolidation may precede further upside. Overall, technical structure leans bullish, with probabilistic upside toward $315–$335 contingent on sustaining above $295 and resolving overbought signals constructively.