Datadog Jumps 4.29% As Technicals Signal Bullish Reversal Above Key Support

Datadog (DDOG) rose 4.29% in the latest session, closing at $131.73 with trading volume of 6.06 million shares. This analysis examines key technical indicators using the provided historical data.
Candlestick Theory
The most recent candle shows a strong bullish body (open $128.01, close $131.73) following two small bearish candles, forming a Morning Star-like pattern. This reversal signal is reinforced by the price bouncing near the $126 support level (tested on 2025-08-26). Resistance is evident near $132-$133, where multiple prior highs clustered (2025-08-22 high: $132.38, 2025-08-07 high: $149). The $126-$128 zone now acts as critical support, having contained recent sell-offs.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages exhibit a bullish alignment. Current price trades above all three major MAs (50DMA ≈ $127.50, 100DMA ≈ $124.80, 200DMA ≈ $119.40). The 50DMA has consistently supported price action during pullbacks (notably on 2025-08-14 and 2025-07-10). Golden Cross formations persist with the 50DMA above both longer averages, confirming the primary uptrend. Recent price strength above the converging MAs suggests bullish momentum is reasserting.
MACD & KDJ Indicators
MACD (12,26,9) shows a bullish crossover emerging, with the histogram turning positive after three weeks of neutral readings. This aligns with the price rebound from $126. Meanwhile, KDJ (14,3,3) registers K=82/D=76 – approaching overbought territory but with upward slope intact. While KDJ's overbought reading warrants caution, the absence of bearish divergence suggests momentum remains constructive. Both oscillators concur on near-term upside potential, though KDJ's elevation may precede consolidation.
Bollinger Bands
Price pierced the upper Bollinger Band (20-day, 2σ) at $131.50 on 2025-08-27 after two weeks of band contraction (volatility compression). This breakout from a tight consolidation suggests renewed directional momentum. The expansion coincides with above-average volume, lending credibility to the move. Sustained trading above $130.50 would confirm bullish band expansion, though retracement toward the $128.50 mid-band (20-SMA) could occur before continuation.
Volume-Price Relationship
The 4.29% advance occurred on 6.06M volume – 21% above the 30-day average – confirming buyer conviction. Notably, down days (e.g., 2025-08-26's -1.61% on 5.02M volume) featured lighter volume than rallies, indicating limited selling pressure at support. The volume profile shows significant accumulation between $126-$128, reinforcing that zone's importance. Recent volume uptick during advances supports trend sustainability.
Relative Strength Index (RSI)
The 14-day RSI reads 65, rising from neutral (45) a week ago but not yet overbought. RSI divergence is absent: the price low of $126.25 on 2025-08-26 coincided with a higher RSI trough than the $124.52 low on 2025-08-14. This positive momentum structure suggests underlying strength. While exceeding 70 could signal overextension, current readings imply room for further upside before overheating.
Fibonacci Retracement
Applying Fib levels to the recent decline from $149 (2025-08-07) to $126.25 (2025-08-26):
- 38.2% retracement: $135.25
- 50% retracement: $137.63
- 61.8% retracement: $140.00
The latest close at $131.73 approaches the 23.6% level ($130.85). A confirmed break above $132 would target $135.25. The 50% level near $137.63 aligns with the 2025-07-31 swing high ($139.98), creating a confluence resistance zone.
Confluence and Divergence Summary
Confluence exists at $132 resistance (Bollinger Band upper limit + prior swing high). A decisive close above this area would align with bullish signals from MACD, volume, and moving averages, targeting $135–137. The only potential friction is KDJ's near-overbought reading, which may precede minor consolidation. Bearish divergences remain absent across indicators, with price and momentum oscillators moving in sync. Volume patterns and RSI positioning suggest underlying strength dominates near-term sentiment.