Zoom Stock Brushes Off Senate Warning

By Jake Scott / April 09, 2020 / www.schaeffersresearch.com / Article Link

Evaluating data before trading optionsThe U.S. Senate just warned its members against using Zoom as a video chat platform

The U.S. Senate just advised its members against using popular video chat platform Zoom Video (NASDAQ:ZM) due to security concerns, asking them to find an alternative platform while working remotely. Zoom has addressed some of these security concerns by hiring Facebook's (FB) former security head Alex Stamos. Despite this, ZM stock is up 2.3% to trade at $120.42.

On the charts, Zoom's 50-day moving average continues to act as support, while the equity is also looking to topple its 40-day trendline today. Currently, ZM is up a staggering 73.1% year-to-date despite a 19.4% pullback for the quarter.

There is still some pessimism surrounding Zoom. Of the 19 analysts in coverage, just seven rate it a "buy" or better, while the remaining 12 sport a "hold" or worse position. Adding to this is ZM's consensus 12-month price target of $116 stands at a 3.5% discount to the stock's current levels.

Drilling down, ZM sports a 10-day put/call volume ratio of 0.92 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 82% of readings during the past 12 months, suggesting a heavier-than-usual appetite for long puts of late.

While short interest is falling off, down 21% in the last reporting period, the 9.17 million shares sold short still account for a whopping 28.5% of the stocks available float, indicating that short sellers are still firmly in control.