Overall, markets took a breather today after the DOW broke above 17,000 at the end of last week.
Our weekend analysis of the trending move higher in Zillow Inc. pointed out that the $140 level was key support from last week's trading. Z opened the day with a gap down from the 7/3/14 close, and selling pressure ultimately pushed the stock below the $140 level.
Intraday, the stock bounced from $135 to test the trend line around $138. However, the bounce was sold and the stock closed for the day at the lows.
-DMI crept up with this latest flexing of muscle by the bears. The bulls are still in control of the chart overall though, but today's selling is not to be ignored. $140 is now a resistance level, as is overhead resistance in the $145 area. Down below, the $130/$132 area had better hold, as this was a support level tested several times in trading action a few weeks ago.
Options market for Z is not very liquid, but the stock trades decent volume, with 1.62 million shares exchanging hands today. Looking back at the move since May, the stock is still up over $20 a share since breaking above the $108/$112 levels.
This is a great example of a strong trending move higher, but that trending move may be pushing its limits if the bears keep the pressure on.