Opendoor stock forms rare pattern, pointing to a ~70% surge to $10

Opendoor stock price was highly volatile this week as Donald Trump started to focus on the affordability issue, especially on the housing market. OPEN initially dropped after his proposal to ban institutional investors from buying residential homes. 

Technicals suggest that the stock may rebound soon a rare bullish pattern has formed. It may also benefit from its high short interest of over 12%.

Opendoor stock in focus as Trump moves to ban institutional buying

In a major announcement this week, Trump said that he would move to ban institutional investors from buying residential homes. That move led to a sharp decline in Blackstone stock as the company is one of the biggest players in the industry. 

It also affected Opendoor Technologies, a company that focuses on house flipping. Its platform allows users to sell their homes in a few steps, and others to buy homes. 

Still, analysts believe that the company’s business will not be affected significantly. For one, unlike Blackstone, Opendoor does not run a rental business. Instead, it focuses on buying homes, improving them, and then selling. It has also embraced the role of agents in its operations as it seeks to have an asset-light model over time. 

1.8K Reply Copy link Opendoor stock is rising after Trump announced a new measure to lower mortgage rates. In a Truth Social post, he said that he was asking his “representatives” to buy $200 billion in mortgage bonds. He pointed to the fact that Fannie Mae and Freddie Mac were flush with cash. 

Trump is also pushing the Federal Reserve to deliver more interest rate cuts this year. He will have a bigger role on the bank later this year when he unveils his nominee to replace Jerome Powell. 

Stephen Miran, who he brought to the bank, has become the most dovish. In a statement on Thursday, he urged the Fed officials to cut rates by 150 basis points this year. 

Opendoor would benefit greatly if the bank continues cutting interest rates and if mortgage rates continue moving downwards.

To return to growth this year

Opendoor’s finances have deteriorated in the past few months. Its recent results showed that revenue plunged to $915 million from $1.37 billion it made in the same period in 2024. 

This decline happened as it reduced the number of homes sold to 2,568 from the 3,615 it sold in Q3’24. Additionally, the percentage of homes on the market for over 120 days rose to 51% from 23% in the same period. This figure has been in an uptrend in the past few quarters.

Therefore, analysts believe that the upcoming numbers will show that its revenue tumbled by 45% to $592 million in the fourth quarter. This figure will bring its annual revenue to $4.2 billion, down by 18% YoY.

On the positive side, analysts expect that its revenue growth will resume this year. The average estimate is that its revenue will be $4.8 billion, up by 14.7%. The management has also hinted that it will break even this year.

Opendoor share price technical analysis

The daily chart shows that the OPEN stock price has retreated in the past few months. It has slumped from a high of $10.85 in September to $6.45 today. 

On the positive side, the stock has formed a giant falling wedge pattern. This pattern is made up of two descending and converging trendlines. Their spread has continued to narrow in the past few weeks.

The wedge pattern is forming after it surged, meaning that it is part of the bullish flag. Therefore, the most likely scenario is where the stock rebounds this year, potentially to the key resistance at $10.85, up by 70% from the current level.

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