Diamondback Energy Falls 3.26% Amid Bearish Technical Signals

Diamondback Energy (FANG) declined 3.26% in the most recent session, closing at $144.21 amid broader energy sector volatility. The following technical analysis synthesizes multiple frameworks to assess the stock’s trajectory.
Candlestick Theory
Recent price action reveals a bearish confluence. The October 9 session formed a long red candle closing near its low ($144.21), confirming rejection at the $151.50 resistance level established on October 6. This follows a "bearish engulfing" pattern on October 3–6, where a strong up-move ($147.47 close) was negated by a higher high ($152.49) and subsequent selloff. Key support resides at $142.07 (October 2 low), while resistance holds firmly at $151.50. A break below $142.07 could accelerate declines, whereas reclaiming $149.07 (October 8 high) may signal recovery.
Moving Average Theory
The 50-day moving average (approximately $145.50) crossed below the 100-day (~$148.80) in late September, indicating deteriorating medium-term momentum. The current price ($144.21) trades below all three major averages (50/100/200-day), confirming a bearish bias. The 200-day MA near $152.40 aligns with the October 6 high, reinforcing it as a critical resistance zone. This configuration suggests sustained downward pressure unless the price stabilizes above the 50-day MA.
MACD & KDJ Indicators
MACD (12,26,9) exhibits a bearish crossover below its signal line, with the histogram deepening into negative territory since mid-September. This signals strengthening downward momentum. Concurrently, the KDJ oscillator shows the %K line (14-period) at 28 and %D at 35, nearing oversold territory but without a bullish crossover. The absence of divergence suggests continued bearish control; a reversal would require %K to cross above %D while MACD narrows its negative histogram.
Bollinger Bands
Volatility contraction is evident, with the bands narrowing to a 20-day width of ~$5.50 from $9.00 in August. The price piercing the lower band ($142.50 estimate) on October 9 reflects short-term oversold conditions. Historically, such breaches preceded minor rebounds (e.g., August 26 and May 30), but a sustained recovery necessitates reconquering the 20-day midline (~$146.00). Failure to hold the lower band may trigger a volatility expansion favoring the downside.
Volume-Price Relationship
Volume patterns validate bearish sentiment. The October 6 rally to $152.49 occurred on elevated volume (2.5M shares vs. 1.4M average), suggesting distribution. Conversely, the October 9 selloff saw higher volume (1.48M shares) than the preceding two sessions, confirming capitulation. This divergence—higher volume on down days—undercuts recovery prospects. Notably, the August 11 breakdown (-3.65%) on 3.05M shares established a high-volume resistance zone near $141.50.
Relative Strength Index (RSI)
The 14-day RSI reads 42, declining from 55 a week ago and avoiding oversold territory. This neutral reading offers no immediate reversal signal. However, the RSI’s failure to breach 60 during September rallies reflects waning bullish momentum. For context, the March 2025 rebound peaked with an RSI of 67, while oversold conditions (<30) last occurred in April 2025 amid a sharp recovery. Current levels suggest room for further downside before reaching extreme oversold thresholds.
Fibonacci Retracement
Applying Fibonacci to the March–August 2025 swing high ($196.00) and low ($123.16):
- The 38.2% retracement ($142.50) provided support in early June and September but was breached on October 9.
- The 23.6% level ($137.80) aligns with the August 21 low and represents the next critical support.
- Resistance clusters at the 50% level ($159.60), closely overlapping with the 200-day MA. The recent rejection near $151.50 (just below the 38.2% level) reinforces bearish bias.
Confluence and Divergence
Confluence of the $142.50 Fibonacci level, 100-day MA, and volume-based resistance creates a pivotal support zone. A decisive break below may target $137.80. Divergence emerges in RSI/price dynamics: the stock’s lower high on October 8 ($149.07 vs. October 6’s $152.49) coincided with a lower RSI high (55 vs. 59), signaling weakening upside momentum. No notable counter-indicator divergences currently challenge the bearish outlook.
In summary, Diamondback Energy exhibits short-term bearishness supported by moving average alignment, MACD/KDJ momentum deterioration, and volume-supported breakdowns. Key supports at $142.50 and $137.80 warrant monitoring, while recovery above $149.07 is needed to invalidate the downtrend.