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Swing Trade Idea (ZM) – April 11, 2022

Market Outlook:

Equities ended last week on a negative note with both the SPY and QQQ breaking below key support areas and moving lower. What was initially viewed as a short-term retracement has turned into a deeper pullback after an over-extended rally. Yields continue to rise while commodities continue to consolidate at elevated levels. This week, inflation data and earnings announcements for banks will be the main focus. 

ZM Bearish Idea: Our bearish idea for today is Zoom Video Communications (ZM). Since November 2020, ZM has experienced a very strong decline due to poor fundamentals and rising competitive risks. Recently, price has retraced higher to the $125 area and is showing bearish price action which provides a good risk/reward bearish opportunity. The next support area is at $100 which represents the previous swing low. Both 1M and 6M trends are now bearish and with a Relative Strength Score of 2 (out of 10), ZM is a very weak stock that will likely move lower.