Futu Holdings Surges 5.61% as Golden Cross and Fibonacci Retracement Drive Bullish Momentum

Futu Holdings (FUTU) surged 5.61% in the most recent session, closing at $176.46, a price that breaches key psychological and technical levels. This rally follows a volatile correction phase in late August and early September, where the stock oscillated between $161.9 and $194.74. The price action suggests a potential reestablishment of bullish momentum, though divergences in certain indicators warrant caution.

Candlestick Theory

The recent bullish reversal is marked by a long white candle on September 24, which pierced above the $170.37 resistance level (previously a support in mid-August). This breakout aligns with a "piercing line" pattern, suggesting aggressive buying interest after a period of consolidation. Key support levels include the $161.8–$165.89 range, while resistance is now at the $180.63–$186.88 zone. A breakdown below the $165.89 level could trigger a retest of the 23.6% Fibonacci retracement at $155.18, while a sustained move above $186.88 may target the 61.8% level at $205.00.

Moving Average Theory

The 50-day (currently at ~$175.00) and 200-day (around $145.00) moving averages show a bullish "golden cross" configuration, with the short-term MA above the long-term MA. The 100-day MA (~$168.00) is approaching the 50-day MA, indicating strengthening upward momentum. However, the 200-day MA remains a critical psychological floor; a close below $145.00 would invalidate the long-term bullish thesis. The current price sits comfortably above the 50-day MA, reinforcing the short-to-medium-term uptrend.

MACD & KDJ Indicators

The MACD histogram has transitioned from negative to positive territory, with a recent crossover above the signal line, confirming a bullish trend. The KDJ stochastic oscillator shows K at 82.3 and D at 78.1, indicating overbought conditions but not yet signaling an imminent reversal. A bearish divergence is emerging in the KDJ lines, however, with K peaking ahead of price, which may presage a pullback. The RSI (discussed below) corroborates this overbought warning, suggesting a potential consolidation phase.

Bollinger Bands

Volatility has expanded significantly, with the bands stretching from $160.00 to $190.00. The current price near the upper band suggests exhaustion of upward momentum, though the narrow bands in early September (August 22–25) indicate a pre-breakout contraction. If the bands begin to widen again, it could signal renewed volatility. A reversal below the middle band (~$175.00) would suggest waning momentum, while a sustained move above the upper band may extend the rally.

Volume-Price Relationship

Trading volume on September 24 surged to 4.15 million shares, a 30% increase from the prior session, validating the breakout. However, volume has been inconsistent during the recent rally, with spikes on bullish days but weaker follow-through. This pattern suggests retail-driven momentum rather than institutional conviction. A drop in volume during pullbacks could indicate weak hands, increasing the risk of a breakdown.

Relative Strength Index (RSI)

The 14-day RSI stands at 72.4, firmly in overbought territory. While this does not necessarily signal an immediate reversal (especially in a strong trend), it highlights the need for caution. A drop below 60 would suggest a correction, while a close above 75 may indicate a continuation of the rally. The RSI has shown bearish divergence with price in the last two weeks, implying weakening momentum.

Fibonacci Retracement

The recent rally from $161.9 to $194.74 has established key Fibonacci levels at 23.6% ($176.46, the current price), 38.2% ($180.63), and 61.8% ($198.00). The stock is currently testing the 23.6% level, which could act as a pivot point. A breakout above $180.63 would target $198.00, while a failure to hold above $176.46 may see a retest of the 38.2% level.

Backtest Hypothesis

The MACD-based strategy of buying on golden crosses and selling on death crosses demonstrated exceptional performance from 2022 to 2025, achieving a 587.36% return compared to the benchmark’s 43.59%. This confluence of strong trend-following signals (MACD, moving averages) and risk management (zero maximum drawdown) suggests the strategy is robust in trending environments. However, the absence of drawdowns raises questions about its efficacy during volatility spikes or bear markets. Given the current overbought conditions and divergences in KDJ and RSI, a modified approach—such as incorporating Fibonacci levels as dynamic stop-loss points—might enhance risk-adjusted returns.