Zoetis (ZTS) gaps lower

We got a question on Zoetis (ZTS), which reported earnings yesterday. Heading into the print, ZTS had bearish absolute and relative price trends based on declining weekly moving averages. The stock has gapped lower to test the low from November 2022 near 124. So, what's next?

Zoetis (ZTS): A weak chart gaps lower to retest the low from late 2022 near 124

ZTS gapped lower to create a huge high volume downside price gap from 128.11 up to 142.14. Yesterday's low at 122 probed below the November 2022 low at 124.15. While climactic volume does not rule out a rebound into this big gap, the weekly chart shows a breakdown below 139.70 that suggests additional downside risk toward 107. This suggests a sell into strength pattern for ZTS.

Chart 1: Zoetis (ZTS): Daily chart with downside gap and volume

Chart 2: Zoetis (ZTS) (top) and relative to the S&P 500 (bottom): Weekly chart