Rocket Companies Soars 7.5% On Heavy Volume In Fourth Straight Gain

Rocket Companies (RKT) closed at $15.04, surging 7.51% in the most recent session. This marked the fourth consecutive day of gains, resulting in a cumulative 13.00% increase over that period, driven by significantly elevated trading volume.
Candlestick Theory
The recent price action suggests a strong bullish reversal. A clear Bullish Engulfing pattern formed around July 15th, where the down candle closed near the session low ($13.31) was followed by a larger up candle ($13.60), signaling potential exhaustion of selling pressure. This was confirmed by the subsequent sustained uptrend culminating in the strong up candle on July 21st. Key immediate resistance is evident at $15.29 (July 21st high), aligning with the peak before the April-May downturn. Strong support has been established near the $13.20 zone (early June low and recent consolidation), while the psychological $12.00 level acted as major support during the May lows.
Moving Average Theory
The stock price has decisively breached its 50-day moving average (MA) during the recent advance, indicating strengthening short-term momentum. It is currently trading above this shorter-term average. However, it remains below the longer-term 100-day and 200-day MAs. This positioning suggests RKT is undergoing a significant recovery rally within what may still be considered a broader long-term downtrend or consolidation phase; sustained trading above the 200-day MA would be needed to confirm a major trend reversal.
MACD & KDJ Indicators
The Moving Average Convergence Divergence (MACD) signal line has crossed above its baseline and continues to rise, confirming positive momentum and a bullish short-term trend continuation signal. The KDJ indicator shows the %K line consistently above the %D line and moving away from oversold territory, reinforcing the bullish momentum. Neither oscillator is currently signalling overbought conditions on the daily timeframe.
Bollinger Bands
Following a period of contraction (squeeze) reflecting lower volatility near the $13-$14 level throughout June, the price surge on July 21st caused a significant expansion of the bands, breaking upwards through the upper band. While often signaling strong momentum, a close above the upper band on high volume can also suggest the move is potentially overextended in the very short term, warranting monitoring for potential consolidation or pullback.
Volume-Price Relationship
The bullish reversal off the July 15th low ($13.20) was accompanied by noticeably increasing volume, validating the strength of the move. The conviction was strongest on July 21st, where a surge to a four-month high close ($15.04) coincided with the highest daily volume recorded in the provided dataset (over 38 million shares). This high-volume breakout significantly increases the likelihood that the $15.00-$15.30 zone becomes new support and suggests the current uptrend has strong underlying participation.
Relative Strength Index (RSI)
Calculating RSI (using 14-period): Current RSI is estimated to be approximately 65 based on the price action and strong recent gains. This positions the indicator firmly above 50 (indicating bullish momentum) but not yet within the overbought territory (>70). However, its upward trajectory indicates increasing momentum; if the rally continues at this pace, RSI may approach overbought levels soon, serving as a potential warning signal for a pullback, though not a definitive reversal signal.
Fibonacci Retracement
Applying Fibonacci retracement to the significant downward swing from the recent peak of approximately $15.40 (April 4th, 2025) to the major low of $10.41 (May 14th, 2025):
0%: $10.41 (Swing Low)
23.6%: $11.59
38.2%: $12.35
50.0%: $12.91
61.8%: $13.47
78.6%: $14.23
100%: $15.40 (Swing High)
The price is currently challenging the 78.6% retracement level ($14.23), with the July 21st high reaching $15.29. Reclaiming the full 100% retracement level at $15.40 is a critical bullish target and major resistance. The 61.8% ($13.47) and 50% ($12.91) levels offer potential support zones should a pullback occur. Notably, the recent strong support near $13.20 converges closely with the 61.8% Fib level and the key horizontal support identified by candlestick analysis, highlighting a significant confluence zone.