Can Slack Zoom Like Zoom on Earnings? Check the Charts

Slack stock has been on fire, rallying more than 24% in the week leading up to earnings. Can it continue higher as Zoom Video did?
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There’s been no slacking among the bulls when it comes to Slack  (WORK) - Get Report stock, which has been enjoying a robust rally as of late.

While the shares are down 2.3% on Thursday morning, the stock has been red-hot over the past week. 

Coming into Thursday, when the San Francisco messaging platform will report earnings after the close, Slack stock was up almost 25% over the prior five days.

From its lows, Slack has well more than doubled, while it is up 75% so far in 2020.

The stock has been hot as the work-from-home theme remains well-established, even as the country continues to reopen.

The strong pre-earnings runup and the follow-through rally in Zoom Video  (ZM) - Get Report are also encouraging Slack investors. 

Zoom reported a monster quarter and powerful guidance, helping extend the stock’s already lofty gains.

Can Slack stock do the same thing?

Trading Slack Stock

Daily chart of Slack stock.

Daily chart of Slack stock.

One can clearly see the runaway momentum over the past week or so.

After Slack stock broke out over resistance at $30, the shares consolidated between $30 and $32, eventually breaking over the latter and vaulting higher.

This setup gave investors an ascending triangle, a bullish technical formation where uptrend support (blue line) guides shares higher against a static level of resistance. 

In this case, $30 was resistance, with traders either looking for an upside breakout or a break of support.

All that has provided a tailwind for the stock price, but with earnings on deck, what should traders do now?

Once Slack reports its quarterly results, investors need to keep several levels in mind. On the upside, see if the stock can rally up to and clear the all-time highs at $42.

Above $42 and Slack stock can keep churning higher, with the 123.6% extension for the 52-week range all the way up at $48.35. 

It may not get there in the short term, but a move through $42 could eventually put that target in play.

On the downside, a dip to the 78.6% retracement and 10-day moving average that holds as support may be a buying opportunity. 

After such a lofty run, a dip wouldn’t be out of the question, and support at this area would show that the bulls remain in control.

Below this area puts the 20-day moving average and uptrend support in play. If the pullback is significant, prior $30 resistance and the 50-day moving average could be on the table.