Datadog Soars 14.92% On Bullish Breakout With Record Volume Surge

Candlestick Theory
Datadog's recent price action exhibits a strong bullish breakout, with July 3rd producing a long green candle (+14.92%) closing near the session high ($155.15) after piercing resistance at $135–$136. This follows a hammer pattern on July 2nd, where the price rebounded from the $131 low to close higher, signaling rejection of lower levels. Immediate resistance is now established at $156.53 (July 3 high), while support lies near $146.91 (July 3 low) and the critical $135 consolidation zone from late June.
Moving Average Theory
The stock trades decisively above key moving averages, confirming a bullish trend structure. The 50-day MA (approx. $125) crossed above the 200-day MA (approx. $115) in late June, forming a "golden cross." Similarly, the 100-day MA (approx. $120) maintains an upward slope. Current price momentum is reinforced by the July 3rd close ($155.15) exceeding all three averages, with the 50-day MA acting as dynamic support.
MACD & KDJ Indicators
The MACD (12,26,9) shows a strengthening bullish crossover, with the histogram expanding above the zero line since mid-June, indicating accelerating upward momentum. Meanwhile, the KDJ indicator (14-period) reflects overbought conditions, with the K and D lines near 85. While this suggests short-term exhaustion risk, the strong trend may prolong overbought status. No bearish divergence is evident, as price highs align with indicator highs.
Bollinger Bands
Price has surged above the upper Bollinger Band (20 SMA, ±2σ), indicating high volatility and potential short-term overextension. This follows a band contraction in June, signaling a volatility squeeze preceding the breakout. The mid-band (20 SMA near $135) now offers robust support, aligning with prior resistance-turned-support and MA confluences. Band expansion suggests sustained directional momentum.
Volume-Price Relationship
The breakout is validated by significant volume surges: July 3rd recorded 29.99M shares (highest in the dataset), well above the 20-day average (~5M). Volume expanded during the July 1st–3rd advance but was subdued during the preceding June consolidation. This high-volume breakout indicates strong institutional participation and supports trend sustainability.
Relative Strength Index (RSI)
The 14-day RSI has spiked to ~85, deep in overbought territory (>70). While historically preceding pullbacks, the RSI may remain elevated during strong trends. Traders should monitor for potential bearish divergence on retracements, but current alignment with price highs signals robust momentum.
Fibonacci Retracement
Applying Fib levels to the April low ($121.52) and July high ($156.53) reveals critical thresholds. The 23.6% retracement ($146.30) aligns with immediate support near the July 3 low. The 38.2% level ($138.80) converges with the $135 support zone (June lows and 50-day MA). A breach below $138.80 would signal deeper correction risk.
Confluence Points and Divergences
Notable confluence exists at $135–$138, where the 38.2% Fib, 50-day MA, and prior consolidation resistance converge as major support. The July 3rd breakout above this zone, reinforced by volume and MACD, strengthens its technical significance. Minor divergence appears in KDJ/RSI overbought readings against MACD’s unabated bullishness, but trend confirmation from MAs, volume, and candlestick patterns outweighs this. Current dynamics suggest pullbacks to $146–$138 may offer entry opportunities, targeting resistance at $156.53, with a breakout potentially extending gains toward the April high of $158.20.