Zscaler (ZS): Liquidity Below $154—A Drop Imminent?

Zscaler is becoming interesting again, not only due to its earnings call yesterday but also because it has formed a strong sell-side liquidity below $154.

After a period of sideways movement, we anticipate a sell-off to take out the liquidity below, most likely wicking into the $151-$122 area. If this plays out, it should conclude the wave C and wave (2).

We did not believe the earnings report will have a decisive impact, but it still could provide one last push into the $220-$237 range before the expected drop to wave (2).

At this point, we are not placing any limit orders but have set alerts to monitor the development of this scenario closely.