Rocket Companies Is Nearing A Key Resistance Level And May Break Out Even Further Soon

Rocket Companies Inc. RKT shares are trading higher Wednesday as retail traders have renewed interest in the stock.

Rocket Companies, which is the parent company of Quicken Loans and Rocket Mortgage, is getting pushe higher by the retail trading crowd, led by Reddit's WallStreetBets. Some other stocks among this group moving higher Wednesday include Gamestop Corp. GME, AMC Entertainment Holdings Inc. AMC, Express Inc. EXPR, and BlackBerry BB.

Rocket Companies was up 11% at $19.90 at last check. Below is a technical analysis of the chart.

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Rocket Companies Daily Chart Analysis:

• Rocket Companies looks to be forming into what technical traders may call an ascending triangle pattern.
• The stock is trading below the 50-day moving average (green), and is trading below the 200-day moving average (blue), indicating recent sentiment in the stock has been bearish.
• These moving averages may hold as an area of resistance in the future.

Key Levels To Watch:

• The ascending triangle pattern is a bullish continuation pattern that happens when higher lows are squeezed between a flat top resistance.
• The stock has formed higher lows throughout the past couple of weeks. These higher lows are building up to a flat top resistance and are looking to break above and move higher.
• The $19 level has held as resistance for the past few months and now the stock is testing the area it has previously been unable to break above.

What’s Next?

Bullish technical traders would like to see the stock break out of the ascending triangle pattern and see an upwards push. Following a breakout, bulls would like to see the stock consolidate and continue to form higher lows.

Bearish technical traders would like to see the stock fall below the higher low trendline. A cross below this trendline could signal that bears are taking control and the stock may see a strong push downwards.