Jim Cramer tells readers in his Real Money column "Here's What This Investor Revolution Is About" that if they do the research, there are plenty of ways to beat the averages that don't involve joining the Reddit rebellion.
Cramer pointed out Zillow Group (Z) surging as people continue to flee the cities for the suburbs and homes that can support their new stay-at-home or hybrid work schedules. Zillow gives home buyers what they want, easy-to-use home buying tools and services that are working to make home buying a one-click purchase, Cramer said.
How do the charts look? Do they have any curb appeal? Let's check.
In the daily bar chart of Z, below, we can see how prices have rallied from their March low. Prices are trading above the rising 50-day moving average line and above the rising 200-day line. Compared to the 200-day line which intersects around $93, I would consider shares of Z extended or overbought as there are too far above the long-term trend.
The On-Balance-Volume (OBV) line shows a long and steady advance telling us that buyers of ZG have been more aggressive for several months. The Moving Average Convergence Divergence (MACD) oscillator is bullish.
In the weekly Japanese candlestick chart of Z, below, we can see that prices made a large bottom pattern around $30 so the advance we have seen in Z so far is nearly a seven-fold increase. Prices are above the rising 40-week moving average line.
The weekly OBV line is pointed up and just made a new high to finally confirm the price action. The MACD oscillator is clearly bullish.
In this daily Point and Figure chart of Z, below, we can see a potential upside price target in the $250 area.
Bottom-line strategy: The charts of Z do not show a topping pattern nor a long-running bearish divergence. The charts are overbought or extended and that is enough of a reason to be careful with new purchases. I would wait for a reaction back down to the $165 area before putting in a bid.
