This past Tuesday, Zillow (Z) lowered its outlook for 2015 and its CEO said it was going to be a “transition year”. Zillow also said that a longer than expected acquisition of Trulia was weighing on its outlook. As expected, Zillow stock was hammered on Tuesday morning, dropping over 10 percent (as low as 81.07) after the open, before recovering to close down just 1.4 percent.
Today the stock closed at 96.53 (19 percent above those Tuesday lows).
To make sense of the situation from a trader’s perspective, let’s take a look at the Zillow stock chart (see below). Here are some key takeaways from the chart:
- This is a heavily shorted stock.
- There are signs bears have lost control in the short term, and potentially intermediate term.
- The descending trend is strong, but likely unsustainable at this rate.
- Watch for a bullish MACD cross and trendline break.
- Near-term levels to watch include support at 92 and resistance around 100 and 105.
Zillow Stock Chart (Z)
For now, traders will want to keep an eye on the blue downtrend line. Keep this one on your radar.
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No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.