Zscaler Inc. (ZS) - May 27, 2025
Shares of Zscaler Inc. (ZS) have been on the march, alongside
other peers in the cybersecurity space. Earlier this month, SIA highlighted
shares of CrowdStrike, Palantir, Broadcom, and Fortinet as a cluster of names
that have moved up in unison into the favored zone of the SIA NASDAQ 100 Index
Report. Zscaler—a cloud-based cybersecurity company that helps organizations
securely connect users to applications and data—is now being highlighted as a
name that continues to improve technically. Its Zero Trust Exchange platform
replaces traditional network security appliances with a cloud-native solution
that inspects traffic in real time and enforces least-privilege access,
significantly reducing risk in today’s hybrid work environments.
Shares of ZS moved into the favored zone on April 7 as a
newcomer to the SIA Report and continue to climb, currently sitting at position
#8. Having recently brushed up against resistance at the $250 level, the
attached monthly candlestick chart provides an interesting lens to visualize
the strength that buyers are exhibiting. The last two months of trading show
tall bullish green candles with very little upper wick, suggesting that demand
may be in control. Should sellers gain the upper hand, the lower green line at
$170 could act as support. However, if current trends prevail, the upper zone
around $370 might become the next major resistance level to watch.
Next, we turn to the Point and Figure (P&F) chart, where
SIA has plotted three upper resistance levels and three supportive levels. The
P&F chart has yet to confirm a breakout, which may require a move beyond
$258.78. While today’s trading has reached the $257 range, it remains just
below the breakout threshold. As such, risk-reward parameters may still be a
challenge, given the proximity to the top of the current trading range. Support
levels appear at $234.39, $216.54, and lower still at $174.15. On the upside,
should a breakout occur, new P&F resistance levels are plotted (red lines)
at $291.43 and $369.60.
All of this plays out against the backdrop of a strong SIA
relative strength reading for Zscaler—ranking high compared to other stocks in
the SIA NASDAQ 100 Index Report—and earning a perfect 10 out of 10 score when
compared to the five other major asset classes.
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