While loop and If Statement

[j.crater]

Hello,

if "z" in testlist[index]

This line checks if character "z" is in the string "testlist[index]", not if the string is "z". So "pizza" will be True.
What you need instead is

if "z" == testlist[index]

You also don't need and index to iterate a list. You can simply do it like this:

my_list = ['a', 'b', 'c']
for item in my_list:
    print(item)

And instead of "continue", you will need a "break" when the condition is met.