Zillow Group, Inc. (NASDAQ: ZG)

Zillow Group, Inc. operates real estate and home-related information marketplaces on mobile and the Web in the United States. It offers a portfolio of brands and products to help people find vital information about homes, and connect with local professionals. The company’s brands focus on various stages of the home lifecycle, such as renting, buying, selling, financing, and home improvement.

Take a look at the 1-year chart of Zillow (NASDAQ: ZG) below with the added notations:

1-year chart of Zillow (NASDAQ: ZG)

After ZG’s spring and summer rally, the stock declined into a sideways move. As ZG has worked its way higher again, the stock has found support at $36 (green), which was also a clear resistance before ZG broke above it in December. The stock seems to be testing that $36 support in preparation for a move higher.

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The Tale of the Tape: ZG has a key level at $36. Traders could enter a long position on a pullback to $36, with a stop placed under that level. Traders that are bearish on the stock could enter a short position on a break below that level instead.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach