Cummins Rises 1.62% to $361.59 as Bullish Indicators Signal Rebound

Cummins (CMI) gained 1.62% in the most recent session, closing at $361.59 on elevated volume of 949,634 shares. This analysis examines key technical indicators to evaluate the stock’s trajectory.
Candlestick Theory
A bullish reversal pattern emerges in Cummins’ recent price action. The August 1st session ($354.68–$361.49) formed a long red candle, signaling strong selling pressure after testing the $370.5 resistance zone. However, the August 4th session ($356.92–$362.34) printed a decisive green candle that reclaimed over 61% of the prior day’s decline, suggesting buyer conviction near the $355 support. This sets immediate support at $355 (recent swing low) and resistance at $370.5 (July 31st high). A confirmed breakout above $370.5 may invalidate the recent bearish structure.
Moving Average Theory
The moving average configuration reflects a persistent uptrend. The 50-day MA (approximately $350) continues trending above the 100-day MA (~$340) and 200-day MA (~$320), confirming the long-term bullish structure. Recent price action respects the 50-day MA as dynamic support, with the August 4th close ($361.59) holding firmly above it. The consistent order of shorter-term averages above longer-term ones supports bullish continuation, though a sustained breach below the 50-day MA could signal near-term trend deterioration.
MACD & KDJ Indicators
The MACD histogram shows waning bearish momentum. While the MACD line remains below its signal line after the July pullback, the histogram’s diminishing negative slope suggests selling pressure is abating. KDJ metrics align with this view: The %K line (19) recently rebounded from oversold territory (<20), crossing above %D (14) on August 4th, triggering a bullish crossover. This confluence implies a high-probability short-term reversal. The indicators collectively warn against chasing further downside near $355.
Bollinger Bands
Bollinger Bands highlight elevated volatility. The August 1st close near the lower band ($355) coincided with a 7.5% contraction in bandwidth versus July highs—a typical precursor to directional moves. The subsequent rebound toward the mid-band ($359) aligns with mean-reversion tendencies. A close above the mid-band would favor retesting the upper band ($372). Continued band compression suggests a volatility expansion is imminent, likely resolving within 1–2 sessions.
Volume-Price Relationship
Volume dynamics reinforce bullish conviction. The August 4th rally occurred on 7.7% higher volume than the prior session, confirming accumulation at support. Notably, significant advances (e.g., the 7.79% surge on May 12th) consistently occurred on above-average volume (1.4M+ shares), while pullbacks saw lighter participation. This divergence affirms underlying strength. The recent high-volume rejection of prices below $355 further validates this support.
Relative Strength Index (RSI)
The 14-day RSI (~45) exited oversold territory after the August 4th bounce but remains neutral. While the RSI avoids extreme readings, its recovery from a July low of 37 warns against aggressive short positions. Historically, Cummins’ RSI has signaled reversals near 30 (oversold) and 70 (overbought), but false signals occurred during strong trends in Q1 2025. Current RSI positioning supports consolidation or gradual upside.
Fibonacci Retracement
Applying Fibonacci to the July upswing (June 23rd low: $316.34 → July 31st high: $370.51), key levels emerge. The recent pullback bottomed near the 50% retracement ($355), a classic reversal zone. The 61.8% level ($348) remains untested, reinforcing $355 as critical support. A decisive break above the 23.6% retracement ($361) has already occurred, opening a path toward the 0% level ($370.5). A failure below $355 may expose the 61.8% retracement.
Confluence and Divergence
Strong confluence appears at $355, where candlestick support, the 50-day MA, Fibonacci 50% level, and Bollinger lower band converge. This zone underpins the bullish case. However, a minor divergence exists in RSI momentum: Prices made a lower low on August 1st versus late July, while RSI held above its prior trough—a subtle positive divergence. The MACD/KDJ agreement strengthens reversal prospects. Traders should monitor $355 support holds; a break targets $348, while reclaiming $370.5 confirms resumption of the primary uptrend.