This Zscaler "Buy the Dip" Signal is Rarely Wrong

Core Viewpoint - Zscaler Inc's stock has experienced a significant pullback from its recent high, presenting a potential buying opportunity as it tests a historically bullish trendline [1] Group 1: Stock Performance - Zscaler's stock has declined 0.6% to $241.86, marking its 12th loss in the last 14 trading sessions after reaching a three-year high of $336.99 on November 3 [1] - The stock is currently within 0.75 of the 320-day moving average's 20-day average true range (ATR), having remained above it 80% of the time in the past two weeks and 80% of the last 42 trading sessions [2] Group 2: Historical Trends - Historical data indicates that similar signals have led to a 75% chance of the stock being higher one month later, with an average gain of 10.5% [2] - A potential rebound could reduce Zscaler's 20% quarterly drawdown by half, supported by a 14-day relative strength index (RSI) of 13.3, indicating an "oversold" condition [3] Group 3: Options Market Sentiment - An increase in optimism among options traders could positively impact the stock, as calls are currently outweighing puts, with call/put volume ratios ranking higher than 83% of readings from the past year [4] - The Schaeffer's Volatility Index (SVI) for Zscaler is at 39%, indicating that near-term option traders are anticipating relatively low volatility, making options more affordable [5]