Zillow: is the door open to higher price?On the heels of its most recent run up, Zillow (Z) looks to be setting up to push higher. Since the low printed in Nov 2018, Z has steadily begun to carve out higher lows and has finally been able to generate momentum following its initial earnings reaction (5/9). After more than a 50% rip from the low on 5/2 ($31.75), Z finally started to retrace at and around the $49 level. This pullback has come right in to test the most recent breakout zone (6/5 at $44.4 level) and appears to be using this previous resistance level as support(the 2/22 post-earnings pop turned lower the following day at the same price level). After 4 consecutive sessions of trading lower, we finally started to see a change in behavior on 6/13 with a 2.5% gain and close up near the high of the day. The last two sessions have been inside days as Z, and most other names, await the FOMC on Wednesday (6/19). I wouldn't rule a secondary test of the $44.40 level or even a washout of the low on 6/12 ($44) but any sort of false break or rejection of lower price only adds to the bullish picture here. Looking for a break above the 6/13 high and continued strength which would setup a potential retest of the breakdown last summer (Aug 2018) when the stock fell from the $58 level to below $50. A couple ways to play the potential move: buy the break of the 6/13 high ($46.50) on any strength in the coming days; if the stock drifts lower then look for any strength/demand on a secondary test of the $44 level.
