Zillow Stock Drops 3.10% As Bearish Signals Converge At Key $88.45 Resistance

Zillow Group A (ZG) concluded the most recent session down 3.10% at $83.85, establishing a critical technical juncture. The analysis below synthesizes key technical perspectives based on one year of price/volume data, highlighting convergences and divergences across indicators.
Candlestick Theory
Recent price action exhibits a bearish engulfing pattern formed by the September 8th bullish candle (high: $88.45, close: $86.53) and the September 9th down candle that closed near its low ($83.85). This signals near-term exhaustion at the $88.45 resistance level. Immediate support converges at the $82.50 swing low (September 5th), with secondary support at the $80.21 August low. A close below $82.50 would reinforce bearish momentum.
Moving Average Theory
The 50-day moving average (MA) approximates $81.40, while the 100-day and 200-day MAs hover near $76.80 and $71.50, respectively. The current price remains above all three MAs, confirming the primary uptrend. However, the convergence of the 50-day MA with the recent $80-81 consolidation zone creates critical support. A decisive break below the 50-day MA would indicate weakening intermediate momentum.
MACD & KDJ Indicators
MACD (12,26,9) shows the signal line crossing below the MACD line on September 9th, generating a bearish crossover after price peaked at $88.45. This divergence suggests fading upward momentum. KDJ (9,3,3) registers a bearish crossover with %K (33) diving below %D (58) from overbought territory (>80) on September 8th. Both oscillators align in signaling near-term downside pressure, though neither yet indicates oversold conditions.
Bollinger Bands
Price rejection at the upper Bollinger Band (20-day, 2SD) near $88 on September 8th preceded the sell-off. The subsequent close near the mid-band ($81.50) signals mean reversion amidst expanding volatility. Band width expansion supports continued directional momentum, with the lower band ($75) serving as a potential downside target if bearish follow-through emerges.
Volume-Price Relationship
Volume surged 68% to 836k shares during the September 8th rally but contracted 40% during the September 9th decline. This divergence suggests insufficient selling conviction to validate bearish momentum. However, below-average volume during the August consolidation near $80 highlights weak accumulation, questioning sustainability of recovery rallies without volume confirmation.
Relative Strength Index (RSI)
The 14-day RSI cooled to 58 from overbought levels (>70) prior to the sell-off. While retreating from overbought territory, the current reading shows no oversold signal. Bearish momentum would strengthen if RSI breaks below the 50 neutral level. RSI’s failure to confirm the September 8th price high (divergence) reinforces loss of bullish momentum.
Fibonacci Retracement
Applying Fibonacci to the August 20th low ($77.01) and September 8th high ($88.45) reveals key retracement levels. The 38.2% level ($84.10) was breached on September 9th, shifting focus to the 50% retracement at $82.70. This level converges with the August swing low ($82.50), creating a high-probability support zone. A break below $82.50 opens the 61.8% retracement ($81.40), aligning with the 50-day MA.
Confluence & Divergence Summary
Multiple indicators signal vulnerability: bearish candlestick patterns, MACD/KDJ crossovers, and RSI divergence validate resistance near $88.50. However, the 50% Fibonacci level ($82.70) converges with swing low support ($82.50) and the 50-day MA ($81.40), creating a technical bastion. Volume divergence during the sell-off undermines bearish conviction. The primary uptrend remains intact below $81.40, but breach of this zone would trigger a larger correction toward $75.