We're Communicating More Than Ever

JC Parets
July 4, 2020

I find myself on Zoom calls all the time. How about you?

Did you notice that the Communications Index is pushing up against new all-time highs? Did you notice that during the March decline, communications held above their late 2018 lows?

I think all of this points to us paying a little more attention to what's going on in the space.

First of all, check out the Communications Services Index holding above former resistance the past 2 years. That alone is impressive. If we're above 272, there is no reason to be pessimistic about Communications Stocks:

Keep in mind that Facebook and Google combined represent almost half of this entire index. So let's keep in mind what's in this thing. We've already discussed our $FB targets here and $GOOG targets here.

Today, I want to focus on one of our biggest winners this year: Zoom $ZM

I always used this app, less than these days of course, but I was already familiar with the name coming into the Crash. Remember, we were very aggressive sellers of stocks in February (See here, here and here) so $ZM wasn't even on our radar.

On March 10th we built a Corinavirus Index of the stocks with the highest momentum and relative strength readings. Zoom was right near the top of that list giving us a target of $144. This is what that chart looked like at the time:

Notice the relative strength breaking out to new highs as the rest of the market was crashing! This name really stood out!

A month later, we raised that target to 182.

And a month after that, we raised our target to 200.

One for the good guys!

Here's what $ZM looks like today:

As the market continues to not care what JC's upside targets are, we will continue to bet on higher prices. Why not? The trend is up! So is the sector it belongs to (communications). And so is the asset class it represents (stocks).

For me 257 is the level we want to watch. If we're above that, I want to get long this stock once again. This gives us a target up near 378.

I think there is way too much downside risk, and opportunity cost, if $ZM is below 257. So this is only something we want to own if it's above that.

Curious how we came up with this idea?

Check out our NEW Charting School

The feedback we're getting from this 7-lesson course is amazing. So thank you for that.

Let me know if you have any questions!

JC

 

 

 

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