Online discount real estate brokerage firm Redfin (RDFN) went public in the summer of 2017 and did not "take off" until the pandemic when its share price became a "ten bagger". Prices peaked in early 2021 and continued to slide until this November.
Is RDFN ready to make a sustained recovery? Let's check the charts and indicators.
In this daily bar chart of RDFN, below, I can see just part of RDFN's decline. Prices started to move sideways in October but made a slightly lower low in November. Prices have doubled from its nadir but a durable base pattern is going to need more development, in my opinion. A huge volume surge in November supports the idea of a meaningful low but trading volume has only shown a modest increase in the past two months.
The On-Balance-Volume (OBV) line has improved modestly from November. The Moving Average Convergence Divergence (MACD) oscillator is finally above the zero line.
In this weekly Japanese candlestick chart of RDFN, below, I see a price decline of close to two years in duration. Prices have only stopped declining three months ago. A three month sideways movement is not enough, in my opinion, to repair and reverse the prior decline. Prices have moved above the 40-week moving average line but the average line still has a negative slope.
The weekly OBV line has improved the past three months. The MACD oscillator is still below the zero line.
In this daily Point and Figure chart of RDFN, below, I can see an upside price target in the $11 area.
In this weekly Point and Figure chart of RDFN, below, I see the same price target of $11.
Bottom line strategy: Years ago when I was learning the ropes of chart reading from Ralph Acampora, Alan Shaw and Carvel Lange and others, I learned that price movements have a relationship to each other. A big base can support a big rally. A small base is not likely to support a big rally. A long decline is going to need a long repair process.
The charts of RDFN have made a major decline so I expect they will need more base building.
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