Rocket Lab ($RKLB) has been on a tear lately, breaking through key resistance levels and riding strong bullish momentum. But with the RSI flashing overbought signals and volume starting to spike, investors are beginning to wonder — is this rally sustainable, or is a short-term pullback on the horizon?

Let’s dive into the technical.

Price Action: Strong Uptrend, But Overextended

The price recently surged past a critical resistance level at $34.05, confirming a bullish breakout. Since then, $RKLB has continued to climb aggressively, currently trading around $51.39. No reversal candlesticks have formed yet, and the daily close remains near the high — a sign of strong buyer control.

However, the current price is now nearly 50% above the previous breakout level, suggesting it may be entering an overextended zone.

RSI Analysis: Entering Overbought Territory

The 14-day Relative Strength Index (RSI) is now sitting at 75.48, officially in the overbought zone (>70). This doesn’t mean a crash is imminent, but historically, an RSI this high indicates a growing risk of:

  • A price pullback
  • Consolidation
  • Or at least a pause in the uptrend

That said, strong stocks can remain overbought for extended periods, especially in the middle of a momentum-driven breakout.

Volume Profile: Bullish Support or Early Distribution?

One of the more encouraging signs is that volume is increasing alongside price. This rising volume pattern confirms genuine buyer interest and supports the ongoing rally.

However, traders should remain cautious. If the price starts to stall or form topping candles (e.g., a doji, shooting star, or bearish engulfing) while volume remains elevated, it could indicate distribution, where institutional investors begin selling into strength.

Summary & Strategic Outlook

🧪 Technical Indicator 📊 Signal 📈 Implication
Price Action Bullish Uptrend continuation
Volume Bullish Buyer conviction
RSI Overbought (75.48) Risk of pullback
Reversal Candle None yet Trend still intact

If you're thinking of adding to or trimming your position, you should pay attention to:

  • Reversal Candles near current highs
  • Bearish RSI Divergence
  • Price consolidation with high volume
  • Support zone pullbacks (e.g., $42–$45)