Zoom Shares Rally on the Emergence of New Covid Variant

The Coronavirus has affected the global economy for nearly two years now. Despite vaccines now available, the emergence of new variants is threatening life going back to normal, and this is affecting the global economy.

The financial markets have been affected by the emergence of the new variants, but some stocks have been rallying on the back of the latest development.

A Mutated Covid Variant Appears in South Africa

Health authorities have revealed that there is a new mutated variant of the Coronavirus. The mutated Covid-19 appeared in South Africa, and the World Health Organization is set to discuss it soon.

The emergence of the new variant has led the global financial markets to be negatively affected. The stock, crypto and commodities markets have been trading in the red zone over the past few hours.

Despite that, some stocks have been rallying following the news of the mutated Covid variant. The shares of Zoom, the video communications company, is up by more than 5% since the US market opened a few hours ago. Zoom was one of the biggest beneficiaries during the lockdown as companies moved their operations abroad and they used its services to carry out video meetings.

Zoom Could Rally Higher if Lockdowns are Reinstated in Several Countries

The emergence of the Covid variants has forced some countries to reintroduce lockdowns. Zoom and similar stocks could perform excellently over the coming weeks if more countries across the world put in place lockdown measures again.

Zoom’s RSI of 34 is an improvement of the oversold region it was a few days ago, and it could rally towards 50 over the coming days. The MACD line is still below the neutral zone, thanks to Zoom’s poor performance in recent weeks.

However, the stock price could rally higher over the coming weeks and months if the current global condition persists. Year-to-date, Zoom’s stock price has dipped by more than 33%. However, the company could recover its losses if more countries reintroduce lockdowns and companies are forced to work from home again.