Devon Energy Shares Drop 3.49% as Technical Indicators Signal Bearish Momentum Amid Key Support Levels

Devon Energy (DVN) closed the most recent session at $36.55, reflecting a 3.49% decline. This analysis evaluates technical indicators to assess short-term and long-term implications for the stock.
Candlestick Theory
Recent price action reveals a bearish engulfing pattern on January 5, 2026, where the candlestick body fully engulfs the prior day’s bullish candle, suggesting potential bearish momentum. Key support levels are identified at $35.45 (January 5 low) and $34.00 (a recurring psychological threshold), while resistance clusters near $38.08 (January 2 high) and $37.52 (December 12 high). A breakdown below $35.45 may trigger further testing of the $34.00 level, whereas a rebound above $38.08 could re-establish bullish control.

Moving Average Theory
The 50-day moving average (DMA) currently sits at approximately $35.70, while the 200-DMA resides at $34.30. Price has oscillated between these averages recently, indicating a sideways-to-bearish bias. Short-term traders may focus on the 50-DMA as a dynamic support level, whereas the 200-DMA suggests a bearish trend if the price remains below it. The 100-DMA at $35.00 further reinforces this. A crossover above the 50-DMA could signal a potential short-term reversal, but sustained bullish confirmation would require closing above the 200-DMA.

MACD & KDJ Indicators
The MACD line crossed below the signal line in late December 2025, forming a bearish crossover, and has remained negative since, suggesting weakening momentum. The histogram’s contraction implies diminishing bearish pressure but does not guarantee a reversal. The KDJ (stochastic oscillator) indicates oversold conditions (K=25, D=30) as of January 5, 2026, though this may be a false signal given the prolonged downtrend. Divergence between the KDJ and price action (e.g., lower highs in price vs. higher lows in KDJ) suggests potential exhaustion of the bearish move, but confirmation is needed.
Bollinger Bands
Volatility has expanded recently, with the 20-period Bollinger Bands widening from a contraction in late December. The price closed near the lower band ($35.45), a common support zone, but failed to rebound decisively. A sustained close above the middle band ($36.00) would signal increased bullish conviction, whereas a test of the lower band could reinforce bearish sentiment. The bands’ expansion aligns with the MACD’s negative divergence, highlighting a potential turning point.
Volume-Price Relationship
Trading volume surged to 11.88 million shares on January 5, 2026, the highest in recent weeks, coinciding with the 3.49% decline. This suggests strong bearish conviction, as heavy volume typically validates price movements. However, declining volume on subsequent up days (e.g., January 2’s 8.72 million) may indicate waning buying interest. A surge in volume on a rebound above $36.00 would strengthen bullish signals, while muted volume could signal a false recovery.
Relative Strength Index (RSI)
The 14-period RSI has oscillated between 30 and 50 recently, with a current reading of 32 as of January 5, 2026. While this suggests oversold territory, prolonged periods below 30 in a downtrend are common and may not act as a reliable buy signal. A closing RSI above 40 with rising volume would indicate a potential short-term rebound, but a failure to break above 50 could perpetuate bearish momentum.
Fibonacci Retracement
Applying Fibonacci levels to the December 19–January 5 range ($35.84–$36.55), key retracement levels at 38.2% ($36.10), 50% ($36.20), and 61.8% ($36.30) align with recent price action. The 38.2% level ($36.10) was tested on January 2, with a failed rebound, suggesting this level may now act as resistance. A break below the 61.8% level ($36.30) could target the 78.6% level at $36.45, but this would require confirmation through a sustained close below $36.10.

Confluence between the RSI’s oversold reading and the 38.2% Fibonacci level suggests a potential short-term bounce, but bearish momentum remains strong due to the MACD’s negative divergence and volume patterns. Divergences between the KDJ’s oversold signal and the MACD’s bearish trend highlight the need for caution, as the stock may remain in a consolidation phase before resuming the downtrend. Traders should monitor the 50-DMA and $35.45 support level for further directional clues.