Devon Energy Rises 3.24% As Technicals Signal Potential Rebound From Oversold Levels

Devon Energy (DVN) closed at $32.78, up 3.24% in the most recent session, rebounding from prior declines. Below is a technical analysis synthesizing multiple indicators.
Candlestick Theory
Recent price action shows bearish signals with three consecutive down days (July 11-15) culminating in a long bearish candle on July 15 (high: $33.35, close: $32.17), confirming resistance near $33.50. The July 17 bullish engulfing candle (open: $31.63, close: $32.78) suggests potential reversal support at $31.60-$31.70. Key resistance remains at $33.30-$33.50, while sustained breaks below $31.60 may trigger further declines.
Moving Average Theory
The 50-day moving average ($35.50) is positioned above the 100-day ($37.20) and 200-day ($39.10) averages, confirming a downtrend. Price currently trades below all three MAs, indicating bearish momentum. Convergence of the 50-day and 100-day MAs signals impending trend compression. A reversal would require reclaiming the 50-day MA, currently acting as dynamic resistance.
MACD & KDJ Indicators
MACD shows bearish momentum with the signal line above the MACD line and both in negative territory. However, KDJ’s K-line (28) and D-line (32) near oversold levels (<30) hint at potential short-term upside. Divergence appears as KDJ rises while price makes lower lows (July 14-16), suggesting weakening downward momentum. MACD’s lack of bullish crossover tempers optimism.
Bollinger Bands
Bands contracted sharply in late June (volatility low: 4% bandwidth) before expanding during July’s selloff. Price recently rebounded from the lower band ($31.63), but remains near the lower half of the bands. A close above the 20-period midline ($34.00) is needed to signal strength; current band expansion favors directional volatility.
Volume-Price Relationship
Recent down days (e.g., July 14: -2.27% on 6.96M shares) featured higher volume than up days, confirming distribution. The July 17 rally saw moderate volume (6.66M vs. 11.5M the prior down day), raising sustainability concerns. High-volume rejection at $35.19 (July 8, 16.1M shares) established firm resistance.
Relative Strength Index (RSI)
The 14-day RSI (36) sits near oversold territory (<30) but shows no divergence. Historically, oversold RSI readings coincided with bounces (e.g., April nadir: RSI 30 preceded 15% rally). Caution remains advised as RSI can remain depressed in strong downtrends; confirmation via volume/MACD is essential.
Fibonacci Retracement
Using the April high ($47.44) and June low ($26.76), key levels emerge: 23.6% ($30.50) held as support in May-June, while the 38.2% retracement ($34.50) capped July rallies. The recent rebound aligns with the 23.6% support. A sustained break below $30.50 may expose $26.76 lows; upside targets include $34.50 (38.2%) and $37.10 (50%).
Confluence & Divergence
Confluence appears at $31.60-$31.70 (candlestick support, Fibonacci 23.6%) and $34.50-$35.00 (MA resistance, Fibonacci 38.2%, volume barrier). Key divergences include KDJ bullish momentum divergence versus MACD’s entrenched bearishness and price making lower lows. The oversold KDJ and RSI suggest near-term stabilization potential, though volume and moving average resistance warrant caution.