The second half of 2014 has not been kind for Zillow. After being a high flyer into early summer and having some strong news come out, the stock has sold off from $160 and recently broke $100 per share.
A Potential Reversal?
A floor has been built right around $98 on the stock, where buyers have been stepping up aggressively. What is more important here is the stock did gap down under that support on earnings, but failed to see movement lower. That means the aggressive buyers under $100 have been confirmed.
As long as those buyers continue to step up, it is only a matter of time before Z breaks above its recent range high at $110.
A Set Up
You can look to stock or long calls, but another setup is to sell the Dec 95/90 bull put spread for 0.80. As long as Z stays above 95 going into Christmas, then you will have a 19% return on risk. A move back under the earnings low at 94.23 would require you to stop out of the trade.
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