The MACD Model Says It's Time To Buy Zoom Video's Stock

Many traders use moving averages to guide their decision-making.

• When a short-term moving average price of a stock exceeds a lower-term one, it shows there's a good chance it's in an uptrend.
• When the short-term average is below a longer-term average, it means there’s a good chance that the stock is trending lower.
• When these moving average price lines cross each other on a chart, traders use this as a signal to buy or sell.

The Moving Average Convergence Divergence Indicator (MACD) is a popular way to measure moving averages. It generally uses three and combines them to generate signals. On the chart below, when the red line crosses above the black line, it's a sell signal. When it crosses below it, it’s a buy signal.

Since the beginning of the year, it has generated accurate signals for Zoom Video Communications, Inc. ZM and it just had another buy signal. This means there’s a good chance the stock trends higher.