Market disasters, much like those in life, rarely end up being as catastrophic as they feel in the moment. Fear tends to amplify every headline and every selloff until the outcome seems inevitable, as it did for private credit names like Blue Owl earlier this year.

Yet history shows that most of these storms eventually pass -- and often leave behind opportunities. Such an opportunity could be developing with the alternative asset manager Blue Owl Capital. Its stock has dived 23% so far in 2026, after worries about rising loan defaults and redemption requests drove a widespread selloff of private credit names earlier in the year.

That said, it remains smart to wait for a clear technical catalyst before leaning in energetically. Investors should wait for confirmation that selling has truly exhausted itself and that buyers are beginning to take control.

Let us take a look at the daily and monthly charts to assess Blue Owl stock's potential trajectory for the second half of the year.

Looking at the daily chart, the ratio chart versus the State Street Financial Select Sector SPDR exchange-traded fund (ticker: XLF) highlights this stock's relative weakness over the past year. While Blue Owl declined 42%, the XLF has gained 11%. Even so, the technical picture is beginning to improve, with several early signs that a turnaround may be under way.

Round-number theory has come into play following a well-received earnings reaction on July 30 that lifted Blue Owl shares 6%. The previous earnings report on April 30 sparked a 10% rally, reinforcing confidence that the stock may be carving out a durable bottom. Before that, a bullish counterattack pattern completed on April 2 -- followed by a doji on April 9 -- suggested selling pressure was beginning to fade.

A well-rounded bottoming pattern has been developing since February, and Monday's closing price of $11.16 marked a fresh five-month high. As long as the stock remains above the very round $10 level, I view the recent move as the early stages of a breakout. The 200-day simple moving average just above current levels could provide near-term resistance. But in the long run, the stock has the potential to climb toward $14 by year-end, representing a 25% gain from a recent $11.50 on Tuesday.

Turning to the monthly chart, the influence of the psychologically important $10 level is unmistakable, dating back to when Blue Owl began trading as a special-purpose acquisition company six years ago. Candlestick signals have also played a pivotal role, beginning with a bullish hammer in May 2022, followed by a bullish piercing line that July, and another hammer that October.

Momentum accelerated in June 2023 when a bullish engulfing candle sparked a powerful advance that carried the stock to $27 by January 2025, for a gain of 175%. That rally was followed by a difficult stretch, with the stock declining in 10 of the next 14 months, before buyers once again stepped in to defend the familiar $10 level.

The recent candlestick sequence suggests sentiment might be turning. This April produced a spinning top, May followed with a doji, and July completed a bullish engulfing candle -- a combination that points to waning selling pressure and the potential for a longer-term trend reversal.

Blue Owl's recent bounce is a good start, but the real test will be whether it could follow through from here with a sustained recovery.

Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.