The cybersecurity sector has performed exceptionally well over the past year, with leading companies like CrowdStrike, Fortinet, Okta, and Palo Alto Networks all seeing gains exceeding 100% year to date. As the demand for cybersecurity solutions grows alongside the rise of artificial intelligence, the importance of these companies is heightened.
Zscaler, which has faced significant declines—down 65% from its 52-week highs and 13% year to date—appears to be reversing its fortunes. Technical analysis indicates that Zscaler is forming a bottom and breaking out of a downtrend, with key resistance levels identified above $195.
Analysts suggest that if Zscaler can hold above a support level around $165, it could see a rally towards $250 or $265, representing a potential upside of 25% to 30%. The Relative Rotation Graph analysis shows Zscaler improving in relative strength and momentum compared to its peers, indicating a favorable risk/reward setup for investors.
Overall, while caution is advised due to the stock's previous volatility, the current technical indicators suggest a promising opportunity for those looking to invest in the cybersecurity space