Post-Trade Analysis: Frontdoor Inc. (FTDR)

Hello Traders!

Mark from the Signal Trader Pro team here.

Each week, we break down a real trade to show you exactly how the Signal Trader Pro algorithm works—and what we can learn from it.

Today, we’re diving into Frontdoor Inc (FTDR)—a home services company that gave us a classic oversold reversal opportunity.

Company Overview: Frontdoor, Inc. (FTDR)

Frontdoor is the largest provider of home warranties in the United States, operating well-known brands like American Home Shield and 2-10 Home Buyers Warranty. The company’s business model is built on recurring subscription revenue, giving it steady cash flow and high customer retention. It also leverages a vast contractor network to handle a wide range of home repair services, including HVAC, plumbing, and electrical systems.

Spotting the Opportunity:

Market Context & Setup

Frontdoor hit a multi-year high of $64.40 on January 30, 2025, capping off a strong six-month run. From there, the stock began to roll over—falling 10% in the weeks leading up to its Q4 earnings report on February 26.

That’s when the real drop began.

Despite beating estimates, Frontdoor reported a decline in membership count due to weakness in the real estate market. The result was a sharp 20% sell-off in a single day, sending the stock into free fall and dropping its RSI below 30.

That selloff officially put FTDR on our watchlist—but it wasn’t time to enter just yet.

Over the next 24 trading days, the stock continued sliding, falling another 20% and bottoming near $37. RSI remained deeply oversold throughout this stretch. Our system stayed patient, waiting for the key signal we’ve learned to trust: RSI crossing back above 30.

That finally happened on March 24. The very next morning, our algorithm triggered an entry at $38.31—and the trade was on.

Executing the Trade: Entry & Exit

After entering the trade on March 25 at $38.31, Frontdoor traded sideways in a range between $36 and $41 for the next month. There wasn’t much excitement during this period—but for us, that was a good thing. The stock was basing, digesting the drawdown, and preparing for its next move.

That move came on May 1, when Frontdoor released its Q1 earnings. Shares jumped nearly 16% after the company posted strong adjusted earnings and revenue that beat expectations.

We stayed in the trade for a few more days as the breakout gained steam, ultimately reaching our price target and closing the position on May 7 at $53.15—for a +38.7% gain in just 43 trading days, an annualized return of over 290%.

Post-Trade Reflections:

What This Trade Taught Us

The biggest takeaway from this trade was the importance of timing the entry based on RSI behavior—not emotion.

It would’ve been easy to jump into FTDR early, especially after such a dramatic earnings-driven selloff. But the RSI stayed below 30 for weeks, and had we entered too soon, we would’ve been fighting the downtrend. By waiting for RSI to cross back above 30, we entered when momentum was actually shifting in our favor.

That entry rule protected us from premature exposure and a likely losing trade.

We also saw how a dull base can be a powerful setup. For over a month, FTDR traded sideways while RSI recovered. That low-volatility environment laid the groundwork for the sharp post-earnings move. When the stock finally broke out, it did so with conviction.

In the end, this trade was a textbook application of our system: identify behavioral extremes, wait for confirmation, and let strong fundamentals drive the rest.

We’ll be back next week with another trade breakdown—win, lose, or draw—because every trade has something to teach us.

Until then, stay focused, stay disciplined, and stay Signal-Driven.

Disclaimer: This post is not financial advice. The stock market is risky, and any trade or investment is expected to have some, or total, loss. Please do your own research before making any trades. Do not use this information for investment decisions.