Devon Energy Shares Plunge 4.22% on Bearish Engulfing Pattern and Death Cross Signal (14 words)

Devon Energy (DVN) closed the most recent session down 4.22%, extending a bearish trend evident in its price action. This sharp decline, accompanied by elevated trading volume ($826 million), suggests intensified selling pressure. A Candlestick Theory analysis reveals a bearish engulfing pattern on the recent session, with the lower shadow indicating rejection of prior bullish momentum. Key support levels emerge at the 2026-01-12 low of $35.425 and the 2025-11-24 low of $35.16, while resistance clusters near the 2026-01-14 high of $38.72 and the 2025-12-08 high of $36.545. These levels are reinforced by repeated price failures to break above $38.72 and below $35.425 over the past month.
Moving Average Theory highlights a bearish alignment, with the 50-day MA ($35.90) now below the 100-day MA ($36.15) and 200-day MA ($35.95). This "death cross" formation confirms a medium-term downtrend, while the 200-day MA acting as dynamic resistance suggests further bearish potential. Short-term traders may note the 50-day MA crossing below the 100-day MA in early January, a bearish signal that has persisted.

The MACD (12,26,9) has been negative for over three weeks, with a bearish crossover in late December, while the KDJ oscillator shows stochastic bearish divergence—price lows in late December and mid-January are higher than KDJ lows, signaling waning momentum. This divergence, however, is less pronounced in recent sessions as the 4.22% drop compressed the indicator. Bollinger Bands have widened in response to the volatility, with the 20-day volatility band at $36.32–$37.02 now acting as a ceiling. The current close of $36.32 sits near the lower band, suggesting potential for a mean reversion or continuation of the downtrend depending on volume dynamics.
Volume-Price Relationship analysis underscores the sustainability of the recent decline. The 22.4 million shares traded on 2026-01-15 represent a 34% increase from the 16.7 million average over the prior five sessions, validating the bearish move. However, volume has been inconsistent in the preceding weeks, with a 56% drop in volume on 2026-01-14 despite a 2.93% rally, hinting at waning conviction in the rally legs.
RSI (14) has fallen to 24 over the past three sessions, entering oversold territory, yet the price continues to decline—a classic bear market trap where oversold conditions fail to trigger rebounds. This suggests the downtrend remains intact, though a sustained close above $37.00 could trigger a short-term bounce. Fibonacci Retracement levels derived from the 2025-11-24 low ($35.16) to the 2026-01-14 high ($38.72) identify key thresholds: 38.2% at $36.83 and 50% at $36.94. The current price of $36.32 aligns with the 61.8% retracement level, which could serve as a pivot point for trend continuation or reversal.
Confluence between bearish candlestick patterns, moving average alignment, and RSI oversold conditions reinforces the likelihood of further downside, though divergences in the KDJ and inconsistent volume suggest caution. A breakout above $37.00 would likely trigger a test of the $37.50–$38.00 range, where prior resistance and Fibonacci levels converge.