Datadog Rises 3.02% to $136.96 Amid Bullish Reversal Signals

Technical Analysis of Datadog (DDOG)
Datadog shares rose 3.02% to $136.96 in the latest session, with trading volume reaching 7.37 million shares. This rebound follows a recent downturn but occurs below key resistance levels, signaling cautious bullish momentum.
Candlestick Theory
The August 4-6 period formed a bullish reversal pattern: a long-red candle (-4.45% on Aug 5) was followed by a green candle engulfing over 50% of the prior body. This suggests potential exhaustion of selling pressure near the $132 support. Resistance is evident near $140 (recent swing highs on July 24-25), while support holds at $132 (Aug 5 low). A confirmed close above $137.33 (today's high) may signal upward continuation.
Moving Average Theory
The 50-day MA (currently near $130) slopes upward, indicating intermediate-term bullish bias. However, the 200-day MA near $120 underscores persistent long-term strength. Recent price action crossed below the 100-day MA ($134), creating dynamic resistance. Sustained trading above $135 would suggest regaining short-term momentum, though the death cross (50-day below 100-day on July 31) implies consolidation pressure.
MACD & KDJ Indicators
MACD shows a bearish crossover below the signal line, with histogram bars in negative territory since late July. This divergence indicates weakening momentum despite price rebounds. KDJ oscillators (K: 45, D: 38) rebounded from oversold territory but remain below 50, reflecting neutral-bearish momentum alignment. Neither oscillator confirms bullish reversal strength yet.
Bollinger Bands
Bands contracted sharply in early August (volatility dropping to 3.7% vs. July’s 7.2%), preceding the current upside breakout. Price now tests the middle band ($135), with upper band resistance at $142. A successful close above the middle band may trigger band expansion and target $142, while failure could retest lower band support ($128).
Volume-Price Relationship
The Aug 6 advance occurred on above-average volume (7.37M vs. 30-day avg 5.2M), lending credibility to the rebound. However, distribution patterns emerged during July’s sell-off (notably July 31’s -5.98% drop on 10.8M shares). Sustained bullish confirmation requires continued volume expansion above the $137 resistance.
Relative Strength Index (RSI)
Daily RSI (52) rebounded from oversold territory (29.5 on Aug 5) but remains below the neutral 60 level. This recovery aligns with price action but lacks overbought confirmation. Weekly RSI (58) holds above 50, signaling intact intermediate uptrend strength. Bearish divergence persists relative to the July peak (RSI 73 vs. price high $152).
Fibonacci Retracement
Applying Fib levels to the June-August rally ($117–$152), the 50% retracement ($134.5) provided support during the August 5 sell-off. The 61.8% level ($131.7) offers secondary support if breached. Upside targets include the 38.2% retracement at $139.3, aligning with the psychological $140 resistance. Confluence exists between Fib levels and horizontal support at $132.
Confluence & Divergence
Key confluence appears at $132 (Fibonacci 61.8%, Aug 5 low, and volume node), making it critical support. Divergence exists between MACD’s bearish momentum and KDJ’s oversold rebound. RSI divergence relative to July’s price peak warrants caution. The most probable near-term scenario involves range-bound action between $132 support and $140 resistance until MACD or volume confirms directional conviction. Upside bias strengthens above $137 with sustained volume, while failure below $132 risks retesting $128 (lower Bollinger Band).