Zoom Video Communications (ZM) and Peloton Interactive Inc (PTON) pushed higher in early trading, only to state a reversal and both go negative. Both stocks are within pennies of all-time highs and both are dead shorts at these levels. Not only are the metrics like RSI and stochastics insanely overbought, plus the stocks up over 500% from the lows this year, but they are pure COVID-19 plays. As investors enter the final quarter of the year there will be vaccine news.

There are currently at least four vaccines that are in phase 3 trials. At least one or two will make it to market by the first half of 2021. Stocks like Zoom and Peloton will sell sharply. There is likely 30% or more downside in these names from these levels. The selling will start heavily as soon as phase 3 trials wrap up. The reason it will start then is because big funds will have to start unloading their millions of shares and do it slowly so they do not crash the stock too quickly. On Zoom, there is a clear gap fill that gives us the target at $325.00. On Peloton, the level is $58.20.

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