Rocket Lab Surges 8.92% in Two Days as Technical Indicators Signal Bullish Bias Despite Overbought Conditions

Rocket Lab (RKLB) has surged 3.63% in the latest session, marking a 8.92% rally over two days. This sharp rebound follows a volatile correction phase in late November, where the stock plummeted nearly 10% before stabilizing. The recent price action suggests a potential short-term bullish bias, though structural volatility remains evident.
Candlestick Theory
The recent price action features a two-day bullish engulfing pattern, with the second session’s close near the high, indicating strong buying momentum.

Key support levels emerge at the 50.34 (December 5 low) and 44.72 (December 3 low), while resistance is clustered around 53.43 (December 9 high) and 53.50 (December 4 high). A breakdown below 49.05 (December 5 close) could trigger a retest of the November 20 low at 39.30.
Moving Average Theory
The 50-day MA (approximately 49.80) and 200-day MA (around 47.20) suggest a bullish crossover, with the 50-day MA above the 200-day MA, indicating a long-term uptrend. However, the 100-day MA (c. 48.50) acts as a dynamic support. The current price (53.43) sits above all three MAs, reinforcing the trend, but a pullback to the 50-day MA could test its validity.
MACD & KDJ Indicators
The MACD histogram has turned positive, with the line crossing above the signal line, signaling strengthening bullish momentum. The KDJ indicator shows the stock is in overbought territory (K at 85, D at 78), suggesting a short-term pullback may occur. Divergence between MACD and KDJ, however, implies caution: while MACD suggests continued strength, the KDJ’s overbought condition may precede a correction.
Bollinger Bands
Volatility has expanded sharply, with the bands widening to 8.41 (upper) and 48.45 (lower). The current price (53.43) sits near the upper band, indicating overbought conditions. A breakdown below the middle band (c. 50.90) could signal a reversion to mean.
Volume-Price Relationship
Trading volume has surged in the past two sessions, peaking at 17.32 million shares on December 9, validating the recent rally. However, volume has not yet surpassed the October 10 peak of 40.88 million shares, suggesting the move may lack broad-based conviction. A sustained volume drop could indicate waning interest.
Relative Strength Index (RSI)
The RSI stands at 68, approaching overbought territory. While not yet at 70, the rapid ascent suggests a potential overextension. A close below 50 would signal a bearish reversal, though the RSI’s 14-day average (58) remains within neutral bounds, indicating the uptrend is not yet exhausted.
Fibonacci Retracement
Key Fibonacci levels derived from the November 20 low (39.30) to the December 4 high (49.37) include 50.0% at 44.30 and 61.8% at 47.30. The current price (53.43) exceeds the 100% retracement level, suggesting a potential extension to the 161.8% target at 59.00. A breakdown below 44.30 would invalidate the bullish case.

The confluence of bullish MAs, expanding Bollinger Bands, and a strong engulfing pattern supports a near-term rally toward 53.50. However, overbought RSI and KDJ levels, coupled with a lack of volume surge, suggest caution. Divergence between MACD and KDJ indicates a possible short-term pullback to test the 50-day MA. Traders should monitor the 50.34 support and 53.50 resistance for confirmation of trend sustainability.