Rocket Companies Stock Plummets 4.59% Amid Bearish Technical Signals

Candlestick Theory
Rocket Companies (RKT) exhibits notable bearish candlestick patterns amid recent declines. The latest three sessions (2025-08-14 to 2025-08-18) formed consecutive bearish candles, including long red bodies on August 14th (-4.59%) and 18th (-3.78%), confirming distribution near the $19.50 resistance zone. This aligns with the August 13th bullish marubozu’s peak at $19.665, establishing a robust resistance level. Support is emerging near $17.50, validated by multiple bounces in late July and early August. A break below $17.50 may target $16.80, while recovery hinges on reclaiming $18.50.
Moving Average Theory
RKT’s moving averages reflect deteriorating momentum. The 50-day MA (currently ~$16.80) crossed below the 100-day MA (~$17.20) in late July, signaling a bearish bias. The 200-day MA (~$15.50) remains the lone support but is 8% below current prices. Recent closes below all key MAs (50/100/200-day) confirm bearish near-term structure. A sustained recovery requires regaining the 50-day MA, though the widening gap between shorter and longer-term MAs suggests persistent downward pressure.
MACD & KDJ Indicators
MACD histogram values have been negative since early August, with the signal line dominating the MACD line, reinforcing bearish momentum. KDJ metrics are oversold (K: 15, D: 20, J: 5), though continued negative divergence—where price makes lower lows while KDJ fails to reach prior lows—suggests unresolved downward pressure. While oversold, the lack of bullish crossover in either indicator tempers reversal prospects. Confluence exists in sustained bearish momentum signals.
Bollinger Bands
Volatility expanded sharply during the August 13th rally (7.39%), with price touching the upper band near $19.67. Subsequent contraction failed to stabilize prices, leading to a breakdown below the 20-day moving average (mid-band) at $18.20. Current trading near $17.83 positions RKT at the lower band, implying oversold conditions. However, persistent lower-band tests without reversal candles indicate weak buying interest. Bandwidth contraction below 10% suggests imminent volatility expansion—likely downward given the trend.
Volume-Price Relationship
Recent declines show troubling volume patterns. The August 14th drop (-4.59%) occurred on 22.2M shares—nearly double the 30-day average—confirming strong distribution. Conversely, the August 18th loss (-3.78%) saw only 11.8M shares, suggesting exhaustion. This divergence may foreshadow consolidation, but follow-through selling on higher volume would invalidate that thesis. The July 31st rally (+11.98%) on 56M shares remains the only high-volume bullish confirmation in three months.
Relative Strength Index (RSI)
The 14-day RSI reads 32, nearing oversold territory (<30) but avoiding extremes seen in late June (RSI: 28). However, multiple failures to breach 50 since May underscore entrenched bearish momentum. Current levels mirror early July conditions that preceded a brief bounce, though RSI’s inability to hold above 50 during recovery attempts warns of persistent weakness. Oversold readings may offer tactical support near $17.50, but reversals require RSI sustaining above 45.
Fibonacci Retracement
Applying Fibonacci to the March 2025 peak ($19.665) and July 2025 trough ($14.50): the 38.2% retracement at $17.60 held on August 11–12 but failed as resistance thereafter. The 50% level ($17.08) and 61.8% ($16.56) now serve as critical support targets. Confluence exists at $16.56 (61.8% retracement + July 29th low). A close below $16.80 would open this zone. Overhead, the 23.6% retracement ($18.25) caps rebounds.
Confluence & Divergences
Confluence emerges in oversold signals: RSI nears 30, KDJ is deeply oversold, and price tests Bollinger’s lower band. However, MACD’s sustained bearishness, volume divergences, and Fibonacci resistance at $18.25 limit upside. Key divergences include KDJ’s failure to confirm July’s higher low and weakening sell-side volume. While oversold conditions may provoke consolidation near $17.50–$17.80, dominant indicators favor further downside toward $16.56–$16.80 absent bullish reversal catalysts.