Summary
Rocket Companies (RKT) has formed a multi-year Cup & Handle pattern, now testing the key breakout zone at $19.8–20.2. Last week’s earnings beat (+41% EPS surprise, +6.6% revenue surprise) adds bullish sentiment. A confirmed breakout with volume could trigger a strong continuation move toward higher Fibonacci targets.
Technical Confluence
Cup & Handle: Clean rounded bottom from 2022–2024 with a shallow handle retracement – classic bullish continuation setup.
Harmonic Structure (ABCDX – Bat Variant):
Momentum Indicators:
Volume: Recent spikes around earnings support the possibility of sustained interest.
Trade Plan
Breakout Trigger
Daily close > $20.20
Volume ≥ 1.5× 20-day average volume
Entry Levels
Conservative: $20.20–20.60 after confirmed breakout + retest
Aggressive: $19.20–19.60 on handle bounce (higher risk)
Stop Loss
Conservative: < $17.40 (below handle low / major support)
Aggressive: < $18.10 (break back into handle)
Profit Targets
Invalidation
Weekly close < $17.5 would negate the bullish structure in the medium term.
Alternative Scenario (Bull Trap)
If $20.2–20.5 rejects with a reversal candle + low volume, expect a pullback toward $18.2–17.5. A break below $17.5 could extend to $15.8 support.
Fundamental Context
Risk Management
TL;DR
RKT is at a critical Cup & Handle breakout zone post-earnings beat. A confirmed breakout > $20.20 with strong volume targets 22.5 → 26.8 → 30–33, stops at 17.4–18.1. Watch for rejection signals at $20.5 for a possible short-term pullback.
#RKT #CupAndHandle #BreakoutSetup #HarmonicPattern #TechnicalAnalysis #SwingTrade #EarningsBeat
Rocket Companies (RKT) has formed a multi-year Cup & Handle pattern, now testing the key breakout zone at $19.8–20.2. Last week’s earnings beat (+41% EPS surprise, +6.6% revenue surprise) adds bullish sentiment. A confirmed breakout with volume could trigger a strong continuation move toward higher Fibonacci targets.
Technical Confluence
Cup & Handle: Clean rounded bottom from 2022–2024 with a shallow handle retracement – classic bullish continuation setup.
Harmonic Structure (ABCDX – Bat Variant):
- AB ≈ 0.55 of XA
- BC ≈ 0.836 of AB
- CD ≈ 1.677 of BC
- D ≈ 0.861 of XA – potential resistance zone, but breakout above invalidates the short harmonic bias.
Momentum Indicators:
- RSI trending higher, not yet overbought on daily.
- MACD positive with expanding histogram.
- Stochastic elevated, which can remain high during strong breakouts.
Volume: Recent spikes around earnings support the possibility of sustained interest.
Trade Plan
Breakout Trigger
Daily close > $20.20
Volume ≥ 1.5× 20-day average volume
Entry Levels
Conservative: $20.20–20.60 after confirmed breakout + retest
Aggressive: $19.20–19.60 on handle bounce (higher risk)
Stop Loss
Conservative: < $17.40 (below handle low / major support)
Aggressive: < $18.10 (break back into handle)
Profit Targets
- T1: $21.8–22.5 (prior swing high / X point)
- T2: $25.5–26.8 (Fib 1.272 extension)
- T3: $30–33 (Fib 1.618 extension & full cup projection)
Invalidation
Weekly close < $17.5 would negate the bullish structure in the medium term.
Alternative Scenario (Bull Trap)
If $20.2–20.5 rejects with a reversal candle + low volume, expect a pullback toward $18.2–17.5. A break below $17.5 could extend to $15.8 support.
Fundamental Context
- Earnings Beat: EPS surprise +41% ($0.04 vs. $0.028 est.), Revenue +6.6% above estimates.
- Macro Sensitivity: Highly responsive to mortgage market and interest rate outlook. Rate stabilization or declines could act as a tailwind.
- Next Catalysts: U.S. inflation data, Fed rate policy updates, mortgage origination volumes.
Risk Management
- Only take breakout entries with volume confirmation.
- Scale out partial profits at each target.
- Move stop-loss to breakeven after T1 is reached.
- Position sizing: risk ≤ 1–2% of account equity.
TL;DR
RKT is at a critical Cup & Handle breakout zone post-earnings beat. A confirmed breakout > $20.20 with strong volume targets 22.5 → 26.8 → 30–33, stops at 17.4–18.1. Watch for rejection signals at $20.5 for a possible short-term pullback.
#RKT #CupAndHandle #BreakoutSetup #HarmonicPattern #TechnicalAnalysis #SwingTrade #EarningsBeat
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.