Rocket Cos. (RKT) has been a wild one over the past few days.
On Friday, shares popped higher on earnings before slipping lower into the close, although the stock still ended higher by almost 10% as it faded from resistance.
Then on Monday shares popped again, giving a further test into resistance but closing strong on the day after an 11.2% gain.
The solid quarter was in addition to the $1.10 a share special dividend the company announced, which follows the $1 billion buyback plan announced in November.
Fireworks were prepped and ready on Tuesday, with shares erupting 71% on the day despite triggering multiple trading halts during the session.
Down 30% on Thursday and the volatility remains quite heavy. Let’s look at the charts.
Rocket has been stuck in a range for months, bouncing between $19 on the downside and $24 on the upside.
The $24 mark is the resistance point I referenced earlier in the article - the one that the stock faded from after reporting earnings.
After back-to-back tests of this mark, shares were prepping for a big move. I was hoping that perhaps Rocket stock could clear the 2021 high and test into the 61.8% retracement. Perhaps if bulls were lucky, the stock could fill the gap near $31.
How remarkably conservative that outlook was.
Shares gapped above the 61.8% retracement and didn’t hesitate to take out the high at $34.42, before topping at $43.
I was hopeful that Wednesday’s pullback would find support at $34.42. Early in the session it did and bulls got a decent bounce as a result, but the move couldn’t stick.
Now well below that mark, let’s see if it closes below it. There is a silver lining though, as shares hold the 61.8% retracement and VWAP support near $28.
If that remains the case, keep an eye on that $34.50 area. That will be the mark that either keeps a lid on Rocket stock or gives it the green light to retest its high at $43.
Above $43 and the 161.8% extension is in play at $44.71.
On the downside, look for a test of the 10-day moving average. Should shares fill the gap from this week’s move, bulls need to see $24 resistance turn into support. Back below is a very bad look.