Why would resistance turn into support for Zillow? — TradingView News

Zillow Group, Inc. Z Stocks are trading higher. The company reported earnings and investors responded positively. Earnings estimates ranged from 29 cents to 35 cents. Revenue was $581 million versus estimates of $555 million.

Our team of technical analysts made Zillow ours Stock of the day because it illustrates a general dynamic in the market that smart traders use to profit.

As you can see from the chart, levels around $58.50 represented resistance for the stock in February and early March. In September, this resistance was broken. Then the stock eventually fell back to the $58.50 level, which had previously been resistance turned into support.

The same happened at the $53.70 level. It was resistance in July and turned into support in early September.

At the end of September, the $68.40 level was a resistance level – and now it has become a support level.

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The transformation of resistance levels into support levels is a common occurrence not only in stock markets but in all financial markets.

This happens because of “seller’s remorse.”

There are investors and traders who sell while the stock is at resistance and think they have made a good decision when the price drops afterwards. But when the trend reverses, resistance is broken and the price rises, many who sold regret their decision to do so.

Some of these repentant sellers vow to buy back their shares.

However, they will only do this if they can buy them at the same price they were sold for. So if the stock eventually falls back to the selling price, they place buy orders.

If there are enough of these orders, support will form at the price that was previously resistance.

When a stock is trending down and a trader is looking for information on where to buy it, he should look at the price levels that previously provided resistance. There's a good chance the stock will find support from them. You might even turn around and recover.

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