Rocket Companies Drops 4.59% As Bearish Signals Dominate Technical Outlook

Rocket Companies (RKT) declined 4.59% in the latest session, closing at 18.72 after a volatile period. The following technical analysis integrates multiple frameworks to evaluate its current position and potential trajectory.
Candlestick Theory
Recent price action shows a bearish reversal pattern emerging. The 7.39% white candle on August 13 was followed by a 4.59% black candle on August 14 that closed near its low, forming a bearish engulfing signal near the 19.65 resistance level established earlier in August. Immediate resistance remains at 19.65, while support appears at 18.55 (prior session low). A confirmed break below 18.55 could trigger further downside toward 17.50, the July consolidation zone where multiple wicks formed.
Moving Average Theory
The 50-day moving average (approximately 16.80) crossed above the 100-day MA (approximately 15.50) in late July, generating a bullish intermediate signal. However, price has pulled back from this momentum as it hovers near the 50-day MA. The 200-day MA (approximately 14.40) continues to slope upward, supporting the longer-term uptrend. Currently, the 50/100/200-day MAs stack bullishly (50 > 100 > 200), but failure to hold above the 50-day MA may indicate near-term consolidation.
MACD & KDJ Indicators
The MACD histogram turned negative on August 14 as the signal line crossed above the MACD line—a bearish crossover. Momentum divergence is evident: price made a higher high on August 13 (19.65 vs. prior 19.22 peak), while the MACD peaked lower. The KDJ oscillator (using 9-day settings) shows the %K line at 35 and %D at 55, declining from overbought territory above 80 on August 13. This swift retreat from overbought aligns with the MACD’s weakening momentum, suggesting near-term downward pressure.
Bollinger Bands
Volatility expanded notably during the August surge, with price touching the upper band on August 13. The subsequent rejection pushed RKT back toward the 20-day moving average midline (currently near 18.00). Band width remains elevated relative to June’s contraction phase, indicating ongoing volatility. A retest of the lower band (approximately 16.30) becomes probable if 18.50 support fails, though midline convergence may offer interim stabilization.
Volume-Price Relationship
The August 13 rally occurred on 32.8M shares—the highest volume since May—validating breakout momentum. However, the August 14 decline saw 22.1M shares traded, indicating less conviction than the preceding rally. This divergence suggests the pullback may lack follow-through selling. Notably, the July 31 upswing from 14.50–15.25 occurred on only 23.5M shares versus the 55.9M-volume capitulation low at 11.11 in May, implying stronger underlying demand at lower levels.
Relative Strength Index (RSI)
The 14-day RSI retreated from 67 on August 13 to 52 on August 14, exiting near-overbought territory but remaining neutral. While the RSI avoided a sustained >70 overbought reading, its failure to exceed the prior 75 peak in August despite higher prices reinforces bearish divergence. The indicator’s mid-range position allows room for either directional resolution, though weakening momentum appears dominant currently.
Fibonacci Retracement
Applying Fib levels to the dominant swing low of 10.06 (January 13) and high of 19.67 (August 13) shows immediate support at the 23.6% level (17.40), closely aligned with the 50-day MA. The 38.2% retracement (16.00) converges with the 100-day MA and the May-June consolidation zone—a high-probability support cluster. Given the rapid 60% advance from July’s 13.31 low, a 38.2–50% retracement (16.00–14.90) appears plausible if selling intensifies.
Confluence and Divergence Observations
Significant confluence exists at 16.00–16.50, where the 100-day MA, 38.2% Fibonacci level, and prior resistance-turned-support from June/July align. Bearish divergences dominate near-term signals: MACD momentum and RSI failed to confirm the August 13 price high, while the KDJ’s overbought reversal preceded the decline. Volume divergence on the recent pullback offers counterbalance, suggesting potential stabilization near 18.50. The 50-day MA at 16.80 represents a critical bull/bear threshold—a sustained break could trigger a retest of the 16.00 confluence zone, whereas holding above 18.50 may resurrect bullish potential.