Bearish Setup Case Study - $ZM
$ZM Daily - 2021 to 2022
Zoom had a crazy bull run with the emergence of covid but of course started to fade as fear subsided and people started going back into their work offices. Zoom had a terrible earnings gap in late August of 2021 which led to a long bear trend for this stock. Price quietly consolidated for a couple after this reaction. We ended up breaking the marked support zone which then led to a great breakdown retest opportunity along with 55EMA retest. This retest then led to another long downtrend in which price did not close above its 21EMA for another ~4.5 months resulting in a 60% loss. During this 4.5 month period there were still many short opportunities to catch some quick moves.
What can we learn from this chart?
Follow the trend (learn more about trend analysis)
Follow distribution patterns - indicated by marked volume bars
Retests of breakdowns offer the best risk/reward