ZS Stage 3 Topping: Deep 64.9% Base Signals Caution

Posted on by Eben@CANSLIM Research
ZS daily stock chart with 10, 20, 50, 150 and 200-day moving averages, volume and RS line versus SPY — CANSLIM Research

Zscaler (ZS) is consolidating in a Stage 3 topping pattern, with price churning around a declining 30-week moving average. The market is focused on a deep, 39-week base with a 64.9% correction, which historically carries an elevated failure rate and is considered faulty. Overall sentiment is cautious and deteriorating, as the stock trades 44% below its high and fails multiple trend-template checks.

As of 2026-08-13 · Close $188.18

Stage 3 (Topping) — Price churning around the 30-week MA — topping consolidation (30-week MA 6-week slope: -6.43%)

⚠️ Faulty cup warning: the base is 64.9% deep (above the 38–40% threshold). A correction this deep leaves heavy overhead supply — trapped holders from higher prices are likely to sell into any rally, raising the failure rate of a breakout from this base.

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