Signal Says RDFN Is Headed Towards More Records

The equity's 20-day moving average contained its latest pullback

Digital Content Manager
Jan 13, 2021 at 3:35 PM
facebook X logo linkedin

The shares of Redfin Corp (NASDAQ:RDFN) are down 2.5% at $78.71 at last check, after BTIG downgraded the real estate concern to "neutral" from "buy." Traders shouldn't worry just yet, though, as the equity just hit a Dec. 22, all-time-high of $83.71, and the 20-day moving average contained its latest pullback. What's more, a historically bullish signal now flashing suggests more records could be in store for RDFN.

Specifically, the stock's recent peak comes amid historically low implied volatility (IV), which has been a bullish combination for the equity in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been only three other times in the past five years when RDFN was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th percentile of its annual range or lower -- as is the case with the security's current SVI of 66.3%, which sits just above the 15th percentile of its 12-month range.

White's data shows that a month after these signals, Redfin stock was higher, averaging a significant 32.7% return for that time period. From its current perch, a similar move would put RDFN just above the $105 mark -- well above the stock's December peak. 

RDFN 20 Day

Analysts were pessimistic toward the security coming into today, leaving plenty of room for upgrades and/or price-target hikes going forward. Of the 17 in coverage, 12 carried a tepid "hold" or worse rating. Plus, the stock's 12-month consensus target price of $56.73 is a whopping 28.6% discount to current levels. 

Digging deeper, Redfin stock could benefit from a short squeeze. Short interest rose 14.9% in the last two reporting periods, and the 7.41 million shares sold short make up 8.1% of the stock's available float, or nearly a week's worth of pent-up buying power.

Tailwinds may also come in the form of a shift in the options pits. This is per the equity's Schaeffer's put/call ratio (SOIR) of 1.43, which stands in the 78th percentile of the past 12 months, suggesting short-term options traders have rarely been more put-biased.

Lastly, RDFN's Schaeffer's Volatility Scorecard (SVS) sits at 94 out of 100, indicating it has tended to exceed option trader's volatility expectations over the past year -- a boon for option buyers.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI