Zoom Surges 9.85% as Bullish Reversal and Technical Indicators Signal Strong Uptrend

Zoom Communications (ZM) surged 9.85% in the most recent session, reflecting a sharp reversal from prior bearish momentum. This price action aligns with a potential bullish candlestick pattern, as the prior week’s lower highs and lower lows (e.g., 78.63 on 11/21 and 78.42 on 11/20) suggest a descending channel, followed by a strong breakout above the 86.34 closing price. Key support levels are identified at 78.6 (prior close on 11/24) and 77.42 (11/21 low), while resistance is at 87.23 (10/31 high) and 88.9 (1/28 high). The recent close above the 86.34 level suggests a shift in sentiment, with potential for further upside if the 87.23 level holds.
Candlestick Theory
The recent bullish reversal is underscored by a "shooting star" formation on 11/24 (78.6 close after a 0.04% decline) followed by a strong white candle on 11/25. This pattern indicates short-term bearish exhaustion. Key support at 78.6 and resistance at 87.23 are critical for trend continuation. A break above 87.23 could target 88.9, while a retest of 78.6 may trigger a pullback.
Moving Average Theory
The 50-day moving average (DMA) is approximately 82.5, the 100-DMA around 80.0, and the 200-DMA near 78.5. The current price of 86.34 sits well above all three, suggesting a strong short-term uptrend. The 50-DMA crossing above the 100-DMA in late October (confirmed by the 10/31 close at 87.23) signals a "golden cross," reinforcing bullish momentum. However, the 200-DMA remains a critical long-term support level; a close below 78.5 could trigger a reevaluation of the trend.
MACD & KDJ Indicators
The MACD histogram has turned positive in recent sessions, with the MACD line crossing above the signal line on 11/25, indicating strengthening bullish momentum.

The KDJ (Stochastic oscillator) shows overbought conditions (K=85, D=78) as of 11/25, suggesting potential for a near-term pullback. However, the KDJ’s divergence from price (e.g., lower highs in K while price continues to rise) may indicate a loss of upward momentum, warranting caution.
Bollinger Bands
Volatility has expanded recently, with the upper band at ~88.5 and the lower band at ~76.5. The current price of 86.34 is near the upper band, indicating overbought conditions. A break above 88.5 could extend the rally, but a reversion to the 82.0–84.0 range (mid-band) is probable. Band contraction observed in mid-October (e.g., 10/15–10/17) preceded the October rally, suggesting similar dynamics may unfold if the current expansion subsides.
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Volume-Price Relationship
Trading volume on 11/25 spiked to 12.6 million shares, significantly higher than the 10-day average of ~6.5 million. This surge validates the recent price breakout, as elevated volume often confirms trend strength. However, the volume-to-price ratio (12.6M for a 9.85% gain) suggests aggressive buying, which may not be sustainable unless follow-through occurs. A drop in volume during subsequent sessions could signal waning momentum.
Relative Strength Index (RSI)
The 14-day RSI is currently at ~72, nearing overbought territory. While this aligns with the recent price surge, it also warns of a potential correction. Historical data shows RSI peaks at 70–75 coincided with pullbacks (e.g., 10/31 close at 87.23, RSI ~73). A drop below 65 may indicate a consolidation phase, whereas a sustained RSI above 75 could extend the rally but likely at the cost of increased volatility.
Fibonacci Retracement
Applying Fibonacci levels from the 75.04 low (4/28) to the 88.9 high (1/28), key retracement levels are 83.45 (38.2%), 81.2 (50%), and 78.95 (61.8%). The current price of 86.34 is near the 87.23 high, suggesting a potential retest of the 88.9 level before facing Fibonacci resistance. A breakdown below 83.45 would target 81.2, with 78.95 acting as a critical support zone.
Confluence between the MACD crossover, moving average alignment, and Fibonacci levels suggests a high probability of continued bullish momentum in the short term. However, divergences in the KDJ and RSI overbought conditions caution against overextending long positions. Traders should monitor volume sustainability and key Fibonacci levels for potential trend exhaustion or continuation.