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Fan Yang

Redfin (RDFN) Has Breakout Potential; $20 Remains Key Level

For shares of Redfin $RDFN, the $20 mark has become a key support/resistance pivot level. The $19-$20 area has been support in 2017 and 2018 until price broke it in the second half of 2018. It acted as resistance before further downside the rest of the year. However, we have seen price rally from the $13.50-$14 area in 2019, and price has actually cracked $20 in late February. However, as we can see on the daily chart, price has quickly retreated back below this pivot.

RDFN Daily Chart

(click to enlarge)

At the Crossroad:
- At the moment, price appears to be at the crossroad. While it has found some bullish momentum, pushing the RSI above 70 in January, price has also respected the falling trendline and essentially the $20 resistance.
- However, I think if price can hold above $16, there is upside and pressure on this $20-$21 resistance area. 
- A break below $16 on the other hand would tell me bears are still in control.
- Otherwise, a break above $21 could open up the $26 area, which was the high in July 2018, before the bearish swing to $13.50.
- I like the bullish chances here, but if the overall market is going to slow down, we should anticipate a pullback towards $16-$16.50. Again, a hold above $16 would still be evidence of a price bottom and a bullish outlook, while an eventual break above $21 should further confirm the bullish scenario.

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