RDFIN is fresh off a May 11, record low of $8.64
Real estate brokerage Redfin Corp (NASDAQ:RDFN) is down 6.3% at $10.37 at last check, after the company reported the number of homes for sale fell 8% in the four weeks ending on June 5 -- the smallest year-over-year decline since January 2020 -- thanks to weaker demand. After tumbling down the charts over the past 12 months, culminating in a May 11, record low of $8.64, RDFN seems to have a found a floor at the $9 level. This area of support could be in jeopardy, however, as the security recently approached a historically bearish trendline that may have the stock adding to its 73.1% year-to-date deficit.
According to Schaeffer's Senior Quantitative Analyst Rocky White's latest study, RDFN is within just one standard deviation of its 40-day moving average. The equity has seen five similar signals over the last three years, and was lower one month later in 80% of those cases, averaging a hefty 11% loss for that period. A comparable move from the stock's current perch would place the stock dangerously close to that $9 floor.
Short sellers have been piling on Redfin stock of late. In fact, short interest is up 23% in the last two reporting periods, and the 16.75 million shares sold short account for 16.2% the stock's available float, which is equivalent to more than one week's worth of pent-up buying power.
Additional headwinds could come from a shift in the options pits. This is per RDFN's Schaeffer's put/call open interest ratio (SOIR), which sits higher than just 1% of readings from the past year. This low ranking means short-term options traders are incredibly call-biased at the moment.