i am adding ZLC as an active short at today’s open (barring a major gap down, which is not currently indicated in pre-market trading). ZLC is a classic parabolic move with a potential blow-off top (i.e.-buying climax) as evidenced by the huge volume spike which only occurred once the stock when parabolic (volume on the initial leg up was anemic). add to that the fact that this move up was largely due to short-covering via a massive short squeeze, as evidenced by the short-interest vs. price chart that i overlaid on the daily chart below. hard to say exactly when the music stops on ZLC but looking at the recent candlestick action combined with the big volume surge, i’d say that the odds are pretty good that ZLC will not exceed the recent highs of 6.18. therefore, i am shorting ZLC at the open with a stop not far above that level. targets market on daily chart and i currently favor T1 (4.81).
for reference, i have included a string of the 4 hour charts from the now completed IMOS short, which had a nearly identical pattern and played out for a 35% gain a few months back.
