TRGP Plunges 4.56% As Bearish Engulfing Pattern Signals Downtrend Continuation

Comprehensive Technical Analysis of Targa Resources (TRGP)
Targa Resources (TRGP) closed at $163.30 on July 21, 2025, declining 4.56% on above-average volume of 1.42 million shares, breaking below key support levels and signaling strong bearish momentum in the near term.
Candlestick Theory
The recent price action shows a pronounced bearish engulfing pattern. The July 18 bullish candle (high: $172.70, close: $171.11) was entirely engulfed by the July 21 bearish candle (open near $171.11, low: $162.80, close: $163.30). This pattern occurred near the $170–$172 resistance zone, suggesting exhaustion of buyers. Key support now resides near the June swing low of $160.68, while resistance has solidified at $170–$172 and $174.40 (July 8 high).
Moving Average Theory
The 50-day moving average (near $168) has crossed below the 200-day MA (near $155), confirming a "death cross" – a classical long-term bearish signal. The current price ($163.30) trades below the 50-day, 100-day (~$161), and 200-day MAs, indicating sustained downward pressure. The alignment of these MAs in descending order reinforces a strong bearish trend across timeframes.
MACD & KDJ Indicators
The MACD (12,26,9) exhibits a bearish crossover below the signal line, with the histogram expanding negatively since mid-July. Concurrently, the KDJ oscillator shows the %K line plunging below 20, entering oversold territory. However, the J-line remains below 10, suggesting momentum is still skewed to the downside. While KDJ oversold conditions hint at potential exhaustion, the MACD’s bearish momentum advises caution against premature reversal bets.
Bollinger Bands
Price has breached the lower Bollinger Band ($165), reflecting heightened selling pressure. Bandwidth contracted significantly in early July, preceding the recent volatility expansion. A close below the lower band may signal oversold conditions but often precedes further downside before a reversal. The current position outside the band warns of potential continuation, though a mean-reversion pullback toward the 20-period MA (middle band, ~$168) could emerge near-term.
Volume-Price Relationship
The 4.56% decline on July 21 occurred on 1.42M shares – notably higher volume than the prior two sessions – confirming bearish conviction. Distribution patterns emerged as rallies (e.g., July 10–18) lacked significant volume confirmation, while sell-offs (July 21, June 9) saw volume spikes. This suggests weak demand during recoveries and strong supply during declines, undermining trend sustainability.
Relative Strength Index (RSI)
The 14-day RSI reads 28.7, entering oversold territory (<30). While this traditionally flags potential reversal zones, TRGP has sustained oversold RSI readings during strong downtrends (e.g., April 2025 sell-off). Divergence is absent; RSI confirms the new low in price. Though oversold, the indicator may remain depressed in strong bearish trends, suggesting limited predictive power alone.
Fibonacci Retracement
Applying Fibonacci levels to the April peak ($217.22) and June trough ($127.24):
- 38.2% retracement: $161.50
- 50% retracement: $172.23
- 61.8% retracement: $183.00
The price recently rejected the 50% level ($172.23) decisively, reinforcing it as major resistance. Current trading near the 38.2% support ($161.50) suggests this is a critical pivot zone – a break below could target $157 (June low), while holding may prompt a technical bounce.
Confluence and Divergence Observations
Confluence supports bearish bias: breakdown below MA cluster, bearish engulfing candle, MACD downtrend, and volume-supported decline align with resistance at key Fibonacci and psychological levels ($170/$172). Divergence exists with oversold KDJ/RSI readings against prevailing momentum – while potentially signaling exhaustion, they lack confirmation from price or volume. The dominant technical evidence points to continued downside risk unless TRGP reclaims $168 (50-day MA) with conviction.