Diamondback Energy Drops 5.05% As Technicals Signal Bearish Momentum Below Key Support

Diamondback Energy (FANG) declined 5.05% in the latest session to close at $142.29, marking a significant pullback after challenging the $150 level earlier in the week. The following technical analysis synthesizes key indicators across the required framework.
Candlestick Theory
Recent sessions show bearish momentum acceleration. The September 3rd candle formed a long red body engulfing the prior two sessions’ ranges, confirming selling pressure near the $148.69 resistance. This pattern aligns with resistance at $148-150 (tested multiple times since June 2025), while $137-138 emerges as critical support given August’s consolidation and reversal points. A close below $137 would invalidate this support zone.
Moving Average Theory
The 50-day moving average (MA) at $146.28 crossed below the 100-day MA ($150.12) in late August, confirming intermediate-term bearish alignment. Price currently trades below all key MAs (50/100/200-day), with the 200-day MA at $155.30 acting as major resistance. The widening gap between declining short-term MAs and the flatter 200-day MA reflects strengthening downward momentum.
MACD & KDJ Indicators
MACD histogram bars have extended negative territory since mid-August, with the signal line maintaining a bearish crossover. Concurrently, the KDJ oscillator shows the %K line (currently 18) plunging below %D into oversold territory after failing to sustain above 50. This dual momentum deterioration suggests weak buying interest, though oversold KDJ readings may precede a short-term technical bounce.
Bollinger Bands
Price breached the lower Bollinger Band ($143.50) on September 3rd, signaling an oversold extreme. However, expanding band width (volatility) during this decline implies continuation pressure. A close back inside the bands would be necessary to suggest stabilization, while sustained lower-band deviation often precedes volatile mean-reversion rallies.
Volume-Price Relationship
Distribution patterns appear concerning: the 5.05% sell-off occurred on 1.95 million shares – the highest volume in three weeks – confirming bearish conviction. Conversely, the August 22nd rally (+3.83% on 2.03 million shares) lacked follow-through volume, indicating weak accumulation. Downward moves have increasingly attracted higher volume than rallies since mid-August.
Relative Strength Index (RSI)
Daily RSI sits at 31, nearing oversold thresholds but not yet extreme. While RSI diverged positively in August (higher lows vs. price’s lower lows), that divergence failed to produce meaningful upside. The current reading suggests downside exhaustion may develop near $137 support but requires confirmation from volume or reversal candles.
Fibonacci Retracement
Applying Fibonacci to the 2024-2025 trend (low: $114 on April 9, 2025; high: $200.47 on October 7, 2024) shows critical confluences. The 38.2% retracement ($141.50) was breached decisively on September 3rd, shifting focus to the 50% level ($136.00) – aligning with the $137-138 price-based support. The 61.8% retracement ($130.50) becomes the next bearish target if $136 fails.
Confluence and Divergence
Confluence exists at $136-138, where Fibonacci, horizontal support, and oversold KDJ readings converge, creating a high-probability bounce zone if tested. However, MACD’s persistent bearish crossover and expanding Bollinger Bands contradict the potential RSI/KDJ reversals. Notable bearish volume confirmation on breakdowns versus weak volume on recoveries further undermines reversal potential, suggesting rallies remain sell opportunities until price reclaims the 50-day MA ($146.28).