Rocket Companies Surges 4.20% on Bullish Engulfing Pattern as Technical Indicators Signal Uptrend Momentum

Rocket Companies (RKT) closed the most recent session with a 4.20% increase, pushing the price to $17.88. This move follows a volatile pattern marked by sharp corrections and rebounds, suggesting a dynamic interplay between bullish and bearish forces. The price action over the past month has oscillated between key levels, with notable resistance at $17.99 (2025-08-29 high) and support at $16.68 (2025-08-02 low).

Candlestick Theory

The recent 4.20% rally forms a strong bullish engulfing pattern, confirming a reversal from prior bearish momentum. Key support levels include $17.15 (2025-09-03 low) and $16.68, while resistance is clustered around $17.99 and $18.50 (2025-08-13 high). A breakout above $17.99 would validate a potential continuation of the uptrend, whereas a retest of $17.15 may trigger further consolidation.

Moving Average Theory

The 50-day moving average (currently ~$17.50) is above the 200-day MA (~$16.20), indicating a short-term bullish bias. The price remains above both averages, reinforcing the uptrend. However, the 100-day MA (~$17.30) acts as a dynamic support. If the price dips below this level, it could signal weakening momentum. Confluence between the 50-day MA and candlestick support at $17.15 would strengthen the case for a continuation.

MACD & KDJ Indicators

The MACD line crossed above the signal line last week, suggesting increasing bullish momentum. However, the KDJ indicator shows the price is approaching overbought territory (K=80, D=75), which may indicate a short-term pullback. A divergence between MACD and KDJ could highlight a potential false breakout. Traders should watch for a MACD histogram contraction as a bearish signal.

Bollinger Bands

Volatility has expanded recently, with the upper band at $18.00 and the lower band at $16.50. The price is currently near the upper band, suggesting a potential overbought condition. A contraction in band width is unlikely in the near term due to elevated trading volume, but a reversal to the lower band could trigger a test of key support levels.

Volume-Price Relationship

The recent 4.20% gain was accompanied by elevated volume (17.76M shares), validating the bullish move. However, volume has trended lower in recent pullbacks, indicating weakening bearish conviction. Divergence between volume and price during corrections (e.g., lower volume on declining prices) suggests the uptrend may persist.

Relative Strength Index (RSI)

The RSI is approaching overbought territory (~68), a warning that a pullback may follow. While not yet in overbought territory (70+), the RSI’s rapid ascent aligns with the MACD’s bullish signal. A drop below 50 would suggest a shift in momentum, but confluence with moving average support is critical for trend validation.

Fibonacci Retracement

A key Fibonacci level at 61.8% ($17.15) aligns with recent support, while the 50% level (~$17.60) acts as a potential retracement target. A breakdown below $16.68 (38.2% level) would invalidate the current uptrend and open the door to further declines.

Backtest Hypothesis

A backtesting strategy could leverage confluence between RSI overbought conditions and price action above the 50-day MA, with stop-loss placement at the 61.8% Fibonacci level ($17.15). Long entries might target the 50% retracement level ($17.60) with a risk-to-reward ratio of 1:2. Short-term trades could exploit KDJ overbought divergence, while longer-term positions benefit from Bollinger Band breakouts.