“Shares in REA have been running hard since their lows nearly two years ago,” Michael said. “It is an impressive performance from a stock which at face value should have struggled with rising interest rates.
“However, the share price has failed to make any progress since the end of February.
“This is despite technology stocks in the US continuing to head higher.
“Looking at the way REA is trading on the chart, however, tells us that we don’t need to be concerned. REA has been consolidating sideways for the past few months by forming an inverse head and shoulders.
“This is characterised by bounces off a lower level three times where the upper resistance level is around about the same price.
“In this case, upper resistance is near $194.
“This means that a close above $194 is the next buy trigger because it would indicate that the sellers have exhausted their firepower.
“Extrapolating out from this pattern means that a breakout could lead to a rally in the order of $20 from the breakout,” Michael explained.
REA
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