Zscaler shows a bullish double bottom reversal pattern with strong institutional support; target price estimated at $220 based on measured move.

First, I want to look at two stocks here. First of all um Zcaler. Let's look at this on a daily chart. This is in the this is in the AI stack. Um and there's I actually taught a webinar on this.

I'm not going to get into detail here. It's not the right venue. Uh but I I'm I taught a webinar on how these various software companies actually are an integral part of AI and what it can do, where it can do it, stuff like that. So Zscaler is definitely in that complex.

you know, this has had a Nike a pullback of Nike type proportions. Um, but as we look at this here, I mean, doesn't this look like a really really slick double bottom? right now we've got this low here at 120.

Then we got this low here at 120. So, this is the middle part. This is the middle part up at 190. So, the stock ran from 120 up to 190, back to 120. Uh, and then ground around here a little bit.

And then where does it where is it now? Right at 190 again.

So, this is really looking to me like a nice W pattern base reversal popping out above a really, really nasty looking 200 day moving average.

Remember the 200 day moving average reading is the average price over the last 200 days. And I mean to tell you um the last 200 days, okay, right up here, this is where 200 days ago.

Okay, since this time it's been a pretty bad place to be if you're a bull.

So, they're only now starting to come I mean, well, hell, they've been coming into this stock for a while, but we're now seeing, shall we say, the fruits of their labor.

So, now we've got this stock in a range between 160 and 190 as opposed to 120 and 190. So, this is tightening up a little bit. Now look, um I own just a tiny bit of this. I just started a position on this right at the end of the day. Uh and I'll show you why in a sec.

But you have to play the odds here. And the odds are on this two things. First of all, this looks like a bonafide reversal. This was a big volume day, double average volume. The last big volume day here was on earnings.

So, the stock traded big on earnings, fell back over the next several days, took about 10% off, and now it's back higher. So, this was a a pop and then a sell the news and then now let's buy them.

So, this is a good reversal in my in my book. It's a really really good reversal.

And I think Zcaler uh just on a typical kind of an easy measured move about 30 bucks or 16% uh I'd be looking for oh I'd say 220 um as a conservative as a conservative um estimate I guess I'd be looking for this and that's another 15% move probably more but I don't really you don't really make money in probably.

So I've shown you how I do it here. just a measured move width of the channel here added on top on a breakout which looks like what it's doing and that's what I'm that's what I'm looking at now

if we watch and see how this stock traded intraday this is what I'm looking at okay this was 330 on 3 at 3:30 today you can see where volume noticeably picked up been drifting around all day long the algos were fighting it out.

Um and then now we we're saying whoa whoa whoa wait a minute we got now about 100,000 shares traded in 5 minutes. That's a little different from back here. Stock closed up. This is telling us that institutions are still buying and it keeps running up.

Now this is not a big huge percentage move but I'm not talking about the percent. I'm talking about the picture. We wonder are institutions buying this stock or not? And it seems like they are.

Now it's 3:40. We keep going. This is kind of petering out a little bit and then finally this is pulling back um into the close.

So you're never well I shouldn't say never, but it's rare that you're just going to get a stock that runs right up and closes at the high uh and the only reason it closed uh where it did was because the closing bell rang.

You're not going to get that kind of thing. But this is really the tell right here for whether institutions are still buying this stock.

So this gives me some confidence that even if even if the stock even if this pulls even if this happens to pull back I think that this breakout or this se this quai breakout I should say because it's right up at the same level. I think this is something that's going to hold,

especially since we're looking at IGV, the software index. Made a nice move today. Chart's still pretty ugly. Uh, but it made a nice move today. So, I'm liking Zcaler.