In today’s stock of the day, let’s take a closer look at DocuSign, which is showing early signs that a bearish phase may be coming to an end. For several weeks, the price had been moving lower inside a falling wedge pattern, marked with blue lines. This formation usually represents a corrective move rather than a trend-defining decline, and it often sets the stage for a bullish reversal once sellers lose momentum.
That loss of momentum is exactly what we are starting to see now. Recently, DocuSign attempted to break to the downside out of the falling wedge. However, sellers failed to maintain control below the lower boundary of the pattern. The move lower was quickly rejected, and the price returned back inside the wedge. This failed move, highlighted by the orange rectangle, is a false breakout to the downside, which is typically a signal in the opposite direction. In other words, instead of confirming further weakness, it increases the probability of a rebound.
For traders who want additional confirmation before turning bullish, there is a very clear level to watch. The key resistance is the red descending trendline, drawn across the most recent lower highs. A daily close above this red resistance would confirm that the bearish correction is over and would trigger a proper buy signal. In that scenario, the natural upside target would be the upper line of the falling wedge, with the potential for an even broader recovery if momentum accelerates. Until then, the failed breakdown already shifts the bias toward the bulls, suggesting that downside risk is now limited compared to the emerging upside opportunity.