Is DIGITALOCEAN HOLDINGS INC Ready to Break Out of Its Range?

We've identified DIGITALOCEAN HOLDINGS INC (NYSE:DOCN) as a potential breakout candidate based on our stock screener's analysis. This breakout setup pattern suggests that after a strong uptrend, the stock is currently consolidating, potentially signaling a continuation of the trend. Keep an eye on NYSE:DOCN for further developments.

Zooming in on the technicals.

ChartMill utilizes a proprietary algorithm to assign a Technical Rating to every stock. This rating, ranging from 0 to 10, is computed daily by analyzing a variety of technical indicators and properties.

We assign a technical rating of 7 out of 10 to DOCN. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, DOCN is only an average performer.

• The short term is neutral, but the long term trend is still positive. Not much to worry about for now.
• In the last month DOCN has a been trading in the 36.71 - 41.58 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.
• When compared to the yearly performance of all other stocks, DOCN outperforms 47% of them, which is more or less in line with the market.
• DOCN is an average performer in the IT Services industry, it outperforms 60% of 86 stocks in the same industry.
• DOCN is currently trading in the middle of its 52 week range. The S&P500 Index however is currently trading near new highs, so DOCN is lagging the market.

Our latest full technical report of DOCN contains the most current technical analsysis.

How do we evaluate the setup for NYSE:DOCN?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:DOCN currently has a 9 as setup rating:

DOCN has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 40.02. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 39.07, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

How can NYSE:DOCN be traded?

To potentially initiate a trade, it is common practice to wait for the stock to break out of the consolidation zone. This breakout signifies a potential upward movement, and traders may enter the stock at that point. Conversely, if the stock falls back below the consolidation zone, it may be sold at a loss.

Please note that this article should not be construed as trading advice. The information provided is solely based on automated technical analysis and serves to highlight technical observations. It is important to conduct your own analysis and make trading decisions based on your own judgment and responsibility.

Our Breakout screener lists more breakout setups and is updated daily.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.