DOCN – DigitalOcean Holdings, Inc.
Cloud infrastructure stock breaks out after completing a major U-shaped recovery
DOCN – DigitalOcean Holdings, Inc.
Date: 2 June 2026
Sector: Technology Services / Package Software
Exchange: New York Stock Exchange
TradingView link: Monthly & Daily
Higher timeframe structure
DigitalOcean first floated around $39 back in March 2021. After the listing, the stock rose to a high of $131 before entering a long, painful correction. From June 2022 through to February 2026, the stock spent a long period trading below $50, effectively forming the bottom of a very large U-shaped recovery pattern.
When you zoom out to the monthly chart, the structure becomes much clearer. The main pink box was marked between roughly $19 at the lows and $131 at the top. Once the price began to break away from the lower part of that U-shape, it accelerated rapidly back towards the top of the range.
We have now spent around five weeks above the top of the pink box, suggesting that prior resistance at $131 has been cleared. On the balance of probabilities, the stock does not currently appear to want to fall back into that old range.
Lower timeframe/execution analysis
Zooming into the 4-hour timeframe, the structure is constructive. I’ve marked out a series of higher highs and higher lows, indicating a steady upward progression. There was also a strong gap move from within the box up towards the top of the range, and importantly, that gap has not been filled. Instead, price has continued to hold above the old resistance area and push higher.
The key level is now around $165. Previously, the price had been capped around that area, but we have now broken above it and had two clear daily closes above that level at all-time highs. That is positive price action and suggests the stock may be preparing for another leg higher.
Entry trigger
I would like to see one more clean daily close above $165. That would give me three clear closes above the smaller congestion zone and help confirm that this is a genuine breakout rather than a move that quickly falls back into the range.
Initial stop loss
Previous 4-hour swing low.
When should I tighten the stop-loss?
Tighten to the last 4-hour swing low once the stock has moved in my favour.
When do I add to a position
Buy on the next 4-hour pullback; add to position.
Multi-timeframe correlation
3M: Grey candle, although this may partly be due to the lack of data
1M: Blue candle
1W: Blue candle
1D: Blue candle
4H: Blue candle
Potential target range
$188
Activated price targets
1
Am I in this trade
No
Current R multiple
0R