💼 Inside the Portfolio: Updates from our Swing Trading Desk

29 Jan 2025 - Insights, adjustments, and forecasts about our latest swing trades 💹

Position Updates:

• Sold 30% of Redfin Corporation (RDFN)

New Positions and Subscriber Insights:

This week, we initiated two exciting new positions further to enhance the quality and diversification of our portfolio.

We took on a bit more risk by adding new positions, but we’re still sitting on healthy unrealized profits. If Powell’s announcements or big tech earnings trigger a downturn, we’ll swiftly exit to cash to safeguard the strong profit curve we’ve built since the beginning of the year.

As always, entry points and specific details for these new positions were communicated in real time to our paid subscribers via chat through our premium alert system, ensuring they had the opportunity to execute trades promptly. This approach demonstrates our commitment to providing timely, actionable insights to our valued premium members.

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1. Redfin Corporation (RDFN)

Redfin Corporation (RDFN) has positioned itself as a significant player in the digital real estate sector, with its technology-driven brokerage services forming the core of its business model. The company's integrated platform approach combines traditional real estate services with digital solutions, streamlining the home buying and selling process. While facing current market headwinds, Redfin's strategic initiatives and technological infrastructure suggest a potential for market share growth when housing market conditions improve.

The company's latest innovation, Redfin Next, represents a strategic evolution in its service offering, though its full economic impact remains to be evaluated. This platform enhancement aims to provide more comprehensive solutions for both buyers and sellers, potentially creating new revenue streams. However, the company's current financial performance reflects the challenging real estate market conditions, with operational metrics showing pressure from reduced transaction volumes.

Looking ahead, Redfin's prospects are closely tied to an anticipated recovery in the housing market, particularly with potential positive catalysts from changes in the political landscape. The company's digital-first approach positions it to potentially capture increased market share during a recovery phase, though the timeline for such improvement remains uncertain. The competitive landscape presents both opportunities and challenges, as traditional real estate services become increasingly digitized.

Despite current operational challenges, RDFN's valuation metrics suggest potential upside, particularly as a speculative short to medium-term investment. This outlook is tempered by increasing competition in the digital real estate space and the company's ongoing need to differentiate its services. Investors should note that while the current entry point may be attractive, the investment thesis is heavily dependent on a broader real estate market recovery and should be monitored closely for signs of sector improvement or deterioration.

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• Entry Point: The stock is exhibiting a potential inverse head and shoulders pattern formation on the daily chart, a classic technical reversal indicator. Current price action suggests accumulation near the critical support level, with momentum indicators showing early signs of positive divergence. The entry strategy aims to capitalize on a potential breakout above the neckline resistance.

• Support and Resistance Levels: Support is currently established at $7.76 on the daily chart. The first resistance level is at $8.40 on the daily, then $10.00

• Additional Notes: The real estate sector is currently experiencing significant bearish sentiment, trading at historically depressed valuations. This presents a potential mean reversion opportunity, particularly if sector-wide sentiment improves. The risk/reward ratio appears favorable at current levels, with defined support providing a clear invalidation point for the trade thesis.

Entry Day: 22 January

Price: $7.96

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