Realogy Holdings Corp. (RLGY) shares rose 15% during Tuesday's session after the company teamed up with Amazon.com, Inc. (AMZN) to launch TurnKey. Under the new program, Amazon users in 15 metro markets will be eligible to receive up to $5,000 in products and services when purchasing a house through the platform that connects to a Realogy agent.
Craig-Hallum analyst Brad Berning is skeptical that people will go to Amazon.com to search for a realtor or home at any meaningful scale and views the weakness in Realogy competitor Zillow Group, Inc. (ZG) as a buying opportunity. In addition, he sees the TurnKey partnership as "desperation to improve their broker platform" that he views as having structural headwinds.
Earlier this month, Barclays analyst Matthew Bouley lowered his price target on Realogy stock from $9.00 to $5.00, saying that the timing of the company's lawsuit against Compass is a "worrisome indicator" around near-term trends. The link with Amazon comes as Realogy has experienced agent losses around the country amid strong competition from Compass and others.
From a technical standpoint, the stock rebounded from all-time lows to the 50-day moving average at $6.89 before giving up some ground. The relative strength index (RSI) moved off of oversold levels to neutral levels with a reading of 44.27, while the moving average convergence divergence (MACD) could see a near-term bullish crossover. These indicators suggest that the stock could see some more upside ahead.
Traders should watch for a breakout from the 50-day moving average and trendline resistance toward the 200-day moving average and trendline resistance at around $13.00 over the long term. If the stock can't break through the 50-day moving average, traders could see a move to retest its all-time lows over the coming sessions. The company's next earnings date is Aug. 8, 2019, which could provide the next big catalyst.
The author holds no position in the stock(s) mentioned except through passively managed index funds.