Diamondback Energy Rises 3.27% With Bullish Reversal Signals Near Key $136 Support

Candlestick Theory
Diamondback Energy's recent candlestick patterns reveal critical support and resistance dynamics. The stock closed at $140.93 on July 17, 2025, marking a 3.27% gain with a bullish engulfing pattern following a doji candle on July 16. This signals potential reversal momentum after a consolidation phase near the $136–$138 support zone, which has held twice in the past week. Immediate resistance is observed near $142, aligning with the July 15 high, while stronger resistance sits at $145–$146, where multiple prior rallies stalled. A sustained break above $142 could trigger further upside, whereas failure to hold $136 may intensify selling pressure.
Moving Average Theory
The 50-day moving average (MA) at $143.4 currently caps upside momentum, as evidenced by the July 14 rejection. However, the 100-day MA ($152.8) and 200-day MA ($162.1) slope downward, confirming the broader bearish trend. Short-term price action trades below all three key MAs, indicating persistent selling pressure. A bullish divergence is noted as the 50-day MA shows signs of flattening, but recovery sustainability would require a decisive close above the 50-day MA to shift near-term sentiment.
MACD & KDJ Indicators
The MACD histogram has turned positive for the first time since early July, with the signal line crossing above zero, suggesting nascent bullish momentum. Concurrently, the KDJ indicator shows a bullish crossover (K-line at 45 rising above D-line at 38), though both remain in neutral territory (neither overbought nor oversold). This confluence indicates growing upward potential, but weak volume during the July 17 advance warrants caution. Divergence is absent, aligning with the recent price recovery.
Bollinger Bands
Bollinger Bands highlight elevated volatility, with a 20-day bandwidth expansion to 12% during the mid-June selloff. Price currently trades near the middle band ($138.6), recovering from the lower band ($125.5) tested in April. The July 17 close above the middle band signals short-term strength. However, the upper band at $151.6 represents a formidable resistance ceiling, requiring significant volume conviction to breach.
Volume-Price Relationship
Volume analysis reveals critical validation points. The March 21 spike (7.8M shares) coincided with a key reversal at $158.50, establishing resistance. Recent advances, including the 3.27% gain on July 17, saw only moderate volume (1.73M shares), diverging from the high-volume selloff on June 23 (4.57M shares). This suggests recovery attempts lack strong participation. A breakout above $142 must be accompanied by volume exceeding the 20-day average (2.15M shares) to confirm sustainability.
Relative Strength Index (RSI)
The 14-day RSI reads 53, exiting the oversold zone (<30 last tested in April) but remaining neutral. While RSI has climbed from 42 two weeks ago, it stays below the overbought threshold (70), leaving room for upside. A bearish divergence occurred in June when RSI peaked at 68 while price stalled at $155, foreshadowing the subsequent 15% drop. No such divergence exists currently, though RSI’s position near the midline implies indecision.
Fibonacci Retracement
Applying Fibonacci levels to the April–June swing (low: $123.16; high: $155.46) reveals key retracement zones. The 61.8% retracement at $147.6 aligns with the July 11 peak, rejecting further advances. The 50% level ($139.3) provided support in early July, while the 38.2% ($135.5) coincides with recent consolidation lows. The stock’s bounce from this zone on July 17, combined with MACD/KDJ convergence, supports a retest of the 50% level. A breach above $147.6 could open a path toward the 23.6% resistance ($149.8).
Concluding Synthesis
Technical indicators for Diamondback Energy show emerging but unconfirmed recovery signals. Bullish candlestick patterns, MACD/KDJ convergence, and Fibonacci support near $135.5 suggest near-term upside potential toward $142–$145. However, this view is tempered by weak volume validation, resistance from the 50-day MA, and the dominant bearish trend reflected in the descending 100-day/200-day MAs. Confluence exists at $136–$138 (candlestick support, Fibonacci 38.2%, and Bollinger middle band), making it a critical downside pivot. A high-volume break above $145 would invalidate the bearish structure, while failure at $136 may accelerate declines toward the April low ($123). Momentum oscillators and volume dynamics should be monitored for confirmation.