Zillow - Rally Nearing Completion

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Zillow has been unable to rise more than 29.5% in the last year without undergoing a correction. Specifically, each rally of ~28% ends with a correction of at least 16%. Since the last bottom on May 8th, Zillow has appreciated 22%. Patiently waiting for rise to $115-118, marked by red box, for short sale.

Targeting return to the 50SMA, which has proved to be a significant support level . Note how Zillow has bounced off of its 50 SMA six times since late-March. Also important to watch the RSI , which has similarly found support at the lower trend line which has been intact since December.

I've used this pattern in conjunction with the 50SMA and RSI channel to identify short and long entries successfully before and optimistic this remains a good system.

5.19.14 - 3:58PM EST
Update. H&S pattern, with TL resistance overhead.
Playing out as expected so far. Short positioned initiated at $118.13 (5.23.14 - 11:13am EST).
Thanks to Tim's comments, I realized that I should have mentioned that the aforementioned pullback to the low $100s would also immediately turn into a buy signal under this system (so long as the RSI does not close below 50, as indicated on the chart).
+2 Reply
This Zillow (which I use everyday) has such a different chart from other internet-service-info stocks that it really stands out to me. Compare this chart to IWM and you may yourself a really big breakout here. I'll be looking to buy and buy and buy and buy on this pattern. I don't disagree with your trade, but I'm going to go at it from the long side to buy here, buy on the dip and buy the next new high. Meanwhile though, I will be shorting a basket of other stocks in this sector, or the market, to go against it. Thanks again for a great chart and post. Tim
+1 Reply
DavideG timwest
Tim – Couldn’t agree more on the long-term trend, lots and lots of things to like about the chart (one of the principal being the latest cup & handle). I am LTM long, but have swing traded Zillow to capture the volatility shown. Inevitably, the ~28% pattern will eventually end, so I will be using a tight stop loss ($123) if things develop as expected here. Thanks for your comments, they’re always appreciated. Davide
+2 Reply
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