Zillow Stock Surges 4.78% To Near-Term High On Bullish Technicals

Zillow Group A (ZG) concluded the most recent trading session with a notable gain of 4.78%, marking the third consecutive day of advances and bringing the three-day rally to 7.33%. This upward momentum positions the stock near short-term highs, prompting a technical analysis to evaluate potential future price action.
Candlestick Theory
Recent candlesticks reveal a significant bullish pattern formation. The current three-day advance—comprising a 2.30% white candle, a small 0.12% indecisive candle, and a decisive 4.78% bullish close near the session high—suggests accumulating buying pressure. The price has now decisively breached the former resistance level near $81.50, which had capped advances on August 28 and September 4. This breakout establishes $81.50 as new support, while the swing high at $85.20 from the latest session serves as immediate resistance. A confirmed close above $85.20 could extend gains, whereas failure to hold $81.50 may signal a retracement.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages exhibit a bullish alignment, with the shorter-term averages positioned above longer-term ones, signaling a robust upward trend. The current price ($84.78) trades above all three key averages, confirming bullish dominance. Notably, the 50-day MA recently crossed above the 200-day MA (a "Golden Cross") in late July, reinforcing intermediate-term strength. This configuration suggests underlying support near $77.00 (200-day MA) and $79.50 (50-day MA). Sustained trading above these averages indicates trend continuation potential.
MACD & KDJ Indicators
The MACD histogram shows bullish momentum expansion, with the MACD line crossing above the signal line during the three-day rally. Concurrently, the KDJ indicator—specifically the %K and %D lines—has ascended into overbought territory (both >80), reflecting strong short-term upward thrust. While this implies near-term exhaustion risk, the MACD's positive trajectory and lack of bearish divergence suggest underlying strength. Investors should monitor for a potential KDJ reversal crossover, which could signal profit-taking if momentum wanes.
Bollinger Bands
Volatility expanded notably during the latest rally, with price pushing above the upper Bollinger Band ($83.80) on September 5—a sign of strong bullish momentum. The 20-period band width has widened after a contraction phase in late August, indicating heightened directional conviction. While a close outside the upper band often precedes short-term consolidation, the absence of a reversal candle and supportive volume suggest the breakout may sustain. Immediate support lies at the middle band ($80.20), aligning with the candlestick-based $81.50 level.
Volume-Price Relationship
Volume analysis validates the recent breakout. The 4.78% surge occurred on significantly elevated volume (660,517 shares)—the highest in ten sessions—signaling institutional participation. This contrasts with the moderate volume during the preceding two up days, where price advanced on below-average turnover. Such volume expansion on a decisive up day enhances the sustainability of the breakout. Conversely, the August 26 sell-off saw high volume (1,183,556 shares), cementing $85.00 as a major resistance-turned-support zone, which was successfully retested and breached in the current rally.
Relative Strength Index (RSI)
The 14-day RSI, calculated as 61 using recent price changes, resides in neutral territory (neither overbought nor oversold). This reading—derived from an average gain/loss ratio of 0.93/0.59 over 14 days—lacks extreme readings despite the sharp rally. The absence of bearish divergence (price made higher highs alongside rising RSI) reduces immediate reversal likelihood. However, a surge above 70 would flag overbought conditions, potentially triggering short-term consolidation.
Fibonacci Retracement
Applying Fibonacci levels to the August decline (high: $85.01 on August 26; low: $78.35 on September 2) reveals key thresholds. The recent breakout propelled price above the 61.8% retracement ($82.47) and the prior swing high ($85.01), confirming strong bullish reconquest. The 38.2% level ($80.89) aligns with the current breakout point and 50-day MA, reinforcing support. Continued trading above $82.50 (50% retracement) sustains bullish bias, while a close below the 23.6% level ($79.92) would indicate weakness.
Confluence and Divergence Observations
Confluence emerged at $81.50–$82.50, where the breakout level, 50-day MA, and Fibonacci 50% retracement converged, amplifying its significance as support. Volume confirmation and candlestick patterns further validated this zone. No material divergences exist among indicators—momentum oscillators, moving averages, and volume collectively endorse bullish sentiment. However, overbought KDJ readings alongside RSI neutrality warrant vigilance for near-term exhaustion, particularly if volume diminishes on subsequent advances.
In summary, Zillow Group A exhibits robust technical strength, supported by trend-confirming moving averages, decisive breakouts, and validating volume. While short-term overextension may induce consolidation, the confluence of bullish indicators suggests dips toward $81.50–$82.50 could offer support. A sustained close above $85.20 opens upside toward yearly highs near $86.50.