Mike Khouw recently acknowledged that his earlier bearish stance on Zscaler (ZS) was mistaken. He had anticipated a bearish-to-bullish reversal based on the belief that the stock had been excessively penalized by the market. Khouw’s revised approach involves adjusting his position to align with the potential for a rebound. He now focuses on managing the trade to mitigate losses and capitalize on any upward momentum. The cybersecurity firm has faced headwinds, but Khouw sees value in the current price levels, suggesting that the selloff may have been overdone. His strategy includes using options to limit downside risk while maintaining exposure to a possible recovery. The trade adjustment reflects a shift in sentiment, as Khouw now expects Zscaler to benefit from improved market conditions or company-specific catalysts.
Market Outlook
Zscaler (ZS) appears poised for a short-term rebound as the recent selloff may have been overdone. The stock could see upward movement if the company reports strong earnings or gains market share in cybersecurity. However, risks remain from broader tech weakness and competition.
Source: CNBC
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Disclaimer: this content is informational analysis only and does not constitute investment advice.
