Fidelity National (FIS) Gains 3.18% Amid Bullish Reversal and Bearish Divergence in Key Indicators

Fidelity National (FIS) recently surged 3.18% to close at $71.76, reflecting a bullish reversal amid a volatile 12-day correction from a peak of $85.85. The candlestick pattern suggests a potential consolidation phase, with key support levels at $69.93 (August 12 low) and $68.81 (August 21 low), while resistance is clustered around $71.90 (August 22 high). A bullish engulfing pattern on August 12 and a morning star on August 11 indicate short-term buying pressure, but bearish divergence in the KDJ oscillator—where the %K line failed to surpass prior highs despite rising prices—hints at potential exhaustion in the rally.

Moving Average Theory reveals a mixed signal. The 50-day MA ($76.33) remains above the 200-day MA ($75.10), suggesting an uptrend, but the 100-day MA ($76.04) has crossed below the 50-day MA, forming a bearish death cross. This confluence of short-term and long-term indicators points to a weakening trend, with the 200-day MA acting as a critical psychological floor. Price action has recently tested the 50-day MA without breaking it, indicating a potential tug-of-war between bulls and bears.

MACD & KDJ Indicators show divergences. The MACD line (-$0.15) crossed below the signal line (-$0.05) on August 19, triggering a bearish death cross, yet the KDJ oscillator’s %K (45) and %D (40) remain in neutral territory. This disconnect suggests momentum is waning but not yet overbought. The RSI (58) is within the 50–60 range, avoiding overbought (>70) or oversold (<30) extremes, but a recent failure to close above the 200-day MA despite RSI neutrality may signal a breakdown in conviction.

Bollinger Bands highlight volatility contraction. The 20-day band width has narrowed to 1.2% (August 22: $71.90 high to $69.93 low), suggesting a period of consolidation before a potential breakout. Price action is currently near the middle band, with the upper band at $71.90 and lower band at $69.93 aligning with recent support/resistance levels. A break above the upper band could trigger a 3.5% extension to $74.50, while a breakdown below the lower band may target $67.50, aligning with the March 2025 trough.

Volume-Price Relationship validates the recent rally. The August 12–14 surge saw average daily volume spike to 4.1 million shares, a 35% increase from the 3.1 million average over the prior month. This surge in liquidity supports the bullish candlestick patterns. Conversely, the August 19–21 pullback occurred on declining volume (3.1 million vs. 4.5 million), indicating weak bearish conviction. However, the August 22 rally on 3.0 million shares—below the 3.5 million average for the prior week—suggests the bullish move may lack sustained momentum.

Fibonacci Retracement levels from the May–August $85.85 peak to the $69.93 low show the current price at 78.6% retracement ($71.76), a critical psychological level. A break above this level could target the 88.9% extension ($73.10), while a retest of the 61.8% level ($74.00) may confirm a deeper correction. The 50% retracement ($77.89) remains a distant target, requiring a 9% rally to reach.

Backtest Hypothesis

The strategy of buying on MACD golden crosses and selling on death crosses yielded a -21.36% return over the analyzed period, underperforming the benchmark by 60.69%. This poor performance aligns with the observed divergences between MACD and KDJ indicators, as well as the lack of volume confirmation during key price movements. The zero maximum drawdown and negative Sharpe ratio (-0.28) underscore the strategy’s high risk and inability to capitalize on trend strength. A refined approach incorporating Fibonacci retracement levels and volume-confirmed breakouts may mitigate these risks by filtering out false signals and focusing on higher-probability setups.