Rocket Lab's Stock Surges 15.53% in Two Days as Bullish Technical Signals Fuel Momentum

Rocket Lab (RKLB) has surged 10.14% in the most recent session, marking a two-day rally of 15.53%. This sharp upward move warrants a detailed technical analysis to assess its sustainability and potential for further gains or corrections.

Candlestick Theory

The recent price action forms a bullish "engulfing" pattern, where the last two days’ candlesticks show higher highs and higher lows, indicating strong buying pressure. Key resistance levels are identified at $54.03 (recent high) and $49.665 (prior peak), while immediate support is at $48.43 (previous close). The price has consistently held above the $46.17 level, suggesting a potential continuation of the uptrend if it remains above this threshold.

Moving Average Theory

Short-term momentum is reinforced by the 50-day MA crossing above the 200-day MA, forming a golden cross, which historically signals a bullish trend. The 100-day MA at ~$44.50 aligns with the 200-day MA (~$43.34), suggesting medium-term support. However, the price currently trades above all three MAs, indicating a strong uptrend, though a pullback to the 50-day MA (~$47.00) could test the trend’s integrity.

MACD & KDJ Indicators

The MACD histogram has shown a recent expansion, with the MACD line crossing above the signal line, confirming bullish momentum. The KDJ (Stochastic) indicator is in overbought territory, with %K at 82 and %D at 78, suggesting potential exhaustion in the short-term rally. However, no significant divergence between price and momentum indicators is observed yet, reducing the likelihood of an immediate reversal.

Bollinger Bands

Volatility has increased, with the bands widening from a recent contraction in late August. The current price of $53.34 sits near the upper band, reinforcing overbought conditions. A break above $54.03 could trigger further expansion of the bands, while a drop below the 20-day MA (~$48.00) might signal a consolidation phase.

Volume-Price Relationship

Trading volume has surged in the past two sessions, with the most recent day recording 27.89 million shares traded—a 20% increase from the prior day. This supports the validity of the price rally, as rising volume aligns with higher prices. However, if volume fails to sustain this level in future sessions, it may indicate waning buying interest.

Relative Strength Index (RSI)

The 14-day RSI is at 72, entering overbought territory, which typically warns of a potential pullback. Historical data shows RSI often reverts to the 50–60 range after such spikes. However, in strong uptrends, RSI can remain overbought for extended periods. A close below 60 would increase the probability of a retracement to the $46.00–$48.00 range.

Fibonacci Retracement

Key Fibonacci levels from the recent low ($42.39) to high ($54.03) include 50% at $48.21 and 61.8% at $47.22. The current price is testing the 50% retracement level, which could act as a pivot point. A break above $54.03 would target the 161.8% extension at $63.66, though this is contingent on sustained volume and momentum.

Backtest Hypothesis

The backtest of RSI overbought signals from 2022 to 2025 shows a 63.64% win rate over three days and a 72.73% win rate over 30 days, suggesting favorable outcomes post-overbought events. Applying this to Rocket Lab’s current RSI of 72, there is a probabilistic edge for continued gains in the short term, with a maximum potential return of 28.50% over 30 days. However, the strategy’s effectiveness depends on avoiding false signals during market extremes, such as the recent 10.14% single-day move.