Is Zip About to Stage the Mother of All Comebacks?

Just when the market had written it off… Zip Co Ltd (ASX: ZIP) has come roaring back to life. The Buy Now, Pay Later company stunned investors last Wednesday with a 15 per cent surge in its share price after upgrading its full-year earnings forecast to at least $160 million — up from $153 million. With U.S. transaction volumes now growing more than 40 per cent year-on-year, the real question is: are we witnessing the early stages of a full-blown revival?

With the share price now up over 150 per cent since April, Zip is firmly back on the radar. But here’s the big question — is this the beginning of a sustained rally that could see it climb back toward its 2021 highs of $14… or is it just another sucker’s rally? It’s a fair question.

Is Zip’s bullish run sustainable?

The Buy Now, Pay Later sector is famous for its boom-and-bust cycles. Think back to 2020 — Afterpay took off like a rocket before being acquired by Block Inc, while Zip soared more than 1,200 per cent during the same period. But when the tide turned, the crash was brutal. Zip collapsed from $14 to as low as $1.08 earlier this year. So, what makes this time different?

This latest move doesn’t appear to be driven by hype. Behind the scenes, Zip’s fundamentals are improving — and more importantly, institutional investors are starting to step in.

We actually called this weeks ago. On the May 20 episode of the Wealth Within Australian Stock Market Show on YouTube, we spotlighted Zip as one to watch. I pointed out the bullish setup on the chart — and right now, that breakout is gaining serious traction.

This is exactly why we teach traders to trust technical analysis over headlines. If you can spot the setup early, you're not reacting — you're positioning yourself ahead of the move. The next key level is $3.50. A break above that could open the door to $5 and beyond.

So, if you missed Afterpay’s legendary run in 2020, ZIP might just be offering the chance to not make the same mistake twice. Volume and liquidity are rising, so Zip might just be gearing up for something big.

What were the best and worst-performing sectors last week?

The best-performing sectors included Energy, up 6.49 per cent followed by Utilities, up 4.68 per cent and Consumer Staples, up 1.37 per cent. The worst performing sectors included Information Technology, down 0.44 per cent followed by Materials, down 0.42 per cent and Health Care, down 0.40 per cent.

The best performing stocks in the ASX top 100 included Metcash Ltd, up 10.03 per cent followed by Woodside Energy Group, up 9.90 per cent and Origin Energy, up 8.12 per cent. The worst-performing stocks included Flight Centre, down 5.62 per cent followed by Life360, down 5.41 per cent and Qantas Airways, down 5.30 per cent.

What's next for the Australian stock market?

The All-Ordinaries Index extended its bullish run this week, closing up more than 0.3 per cent. But there was some late week selling on Thursday and Friday, which could be a sign of what’s to come. Still, the momentum remains strong, and the all-time high of 8,882 is now well within reach. In fact, a breakout before the end of June is looking more and more likely. But that raises the real question—what happens after we hit a new all-time high?

It’s common to see individual stocks pull back after hitting record levels as traders lock in profits. But does the same apply to indices like the All Ords? Let’s look at the data.

Since 2020, the All Ordinaries has broken to a new all-time high on seven separate occasions. And in every instance, a correction followed within three months. Most of these pullbacks were relatively mild—around 5 per cent—but there were two notable drops exceeding 15 per cent. So, what should we expect this time?

Context is everything. After eight consecutive weeks of gains, a pullback feels overdue. Seasonality supports this too—June is historically the worst month of the year for the All Ords. Yet, so far, the market has completely shrugged off that trend. 

Looking ahead, July is typically the strongest month of the year for the index. So, if we don’t see a meaningful dip in June, history suggests we may not get one until the more volatile months of September and October.

With that in mind, the most likely scenario is this: we break through 8,882, then see a modest pullback—something in the range of 5 per cent—taking the index back toward the 8,400 level. If the pullback runs deeper, look for key buyer support to emerge around 8,100.

Either way, as the All Ords enters record territory, a new wave of opportunity could be just around the corner. A fresh all-time high tends to bring fresh media coverage, renewed investor interest, and—potentially—new momentum. And that might be exactly what this market needs to take the next leg higher.

For now, good luck and good trading.

Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the bestselling and award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores and online.