Zillow stock has pulled back to its bullish 80-day moving average
Shares of online real estate marketplace Zillow Group Inc (NASDAQ:Z) are up 0.7% at $78.78 at last glance, following last session's 9.4% loss. The bear gap occurred after the company's disappointing first-quarter guidance, despite strong fourth-quarter results.
Prior to yesterday's slide, Z hit a Feb. 11 three-year high of $89.39. The stock is outperforming with a 35.1% year-over-year gain, and could soon push back toward those highs, if history is any indicator.
Per Schaeffer's Senior Quantitative Analyst Rocky White, Z has come within striking distance of its 80-day moving average after a lengthy period above it (defined by White as 80% of the time over the past two months and 8 of the last 10 trading days). This has occurred five other times over the last three years, after which the stock was higher one month later 60% of the time with an average 10.4% return. From its current perch, a move of similar magnitude would put Zillow stock at $86.97 -- much closer to its recent peak.
An unwinding of pessimism could provide tailwinds as well, should the stock start to rebound. Despite the stock's recent rally, short interest has been building for the last two weeks, and represents 6.7% of the stock's available float. It would take over four days to cover, at Z's average pace of trading.
Plus, the stock's 14-day relative strength index (RSI) of 34 is nearing "oversold" territory, while its 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 91% of readings from the past year.