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, Stage 3 (Topping), as of September 02, 2026 at 01:14 — CANSLIM Research

Zscaler (ZS) is consolidating in a Stage 3 topping pattern, with price churning around the 30-week moving average and a downward-sloping trend. The stock is forming a deep, faulty base with a 64.9% correction from its high, which historically carries an elevated failure rate. Overall sentiment is cautious and deteriorating, as the trend template fails key checks and no clear VCP contraction is evident.

As of 2026-09-01 · Close $178.17

Stage 3 (Topping) — Price churning around the 30-week MA — topping consolidation (30-week MA 6-week slope: -2.33%)

⚠️ 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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