Are you watching Zillow (Z)? Here’s the trade. (December 15, 2014)
I want to look at Zillow ( NASDAQ:Z ) today in this Free Chart video, and here’s why. I’ve got two different sets of Bollinger Bands here. The first standard deviation are the narrower ones; that’s the one where statistically the close should occur within these two bands about 65 percent of the time. The second set, down here, the close should occur about 91 percent of the time inside those bands.
Well, they’re getting pretty tight together, which sets up a potential situation like this one here. They were pretty narrow here and then what happens? The stock blasts up out of these bands, they start to extend apart, and then you get a move higher, not that big a move higher, but it was a move higher. That’s really about all you can expect from this type of market. But what this move did was it got the stock back above the 50-day moving average, which is where it needs to be if it’s going to be an uptrend, that’s a math thing. So it’s back up above there now and it’s in another squeeze.
My interpretation of this is, that this has really formed kind of a high base, higher relative to where it started trading, but certainly lower than it was here, so now we’ve got a higher trading range right here. I would suggest waiting for the stock to clear $1.20. If it starts moving above $1.20; I’m not that concerned about this peak here for various reasons, the main one is that this is in such a squeeze that if it does start moving above $1.20 you’re likely to get a lot of follow-on buying, because the stock does have a pretty decent short interest in it.
So why don’t you just watch that level and if it moves above 120.00 then consider that a buying signal. Also, it is not lost on me the fact that this stock is up nearly $1.00 when the rest of the market is kind of imploding.
Free Chart