Globalfoundries Stock Jumps 7% On Heavy Volume As Technicals Turn Bullish

Globalfoundries (GFS) surged 6.96% on the latest trading session, closing at $41.66 after ranging between $39.44 and $41.85, accompanied by above-average volume of 2.33 million shares. This significant upward move forms the focal point for the following technical assessment.
Candlestick Theory
The most recent session formed a robust bullish candle following a hammer pattern near $38.95 on July 7, suggesting rejection of lower prices. Key resistance emerges at $41.85 (July 8 high), with secondary resistance near the $44.55 February peak. Support is established at $38.71 (July 7 low), aligning with the psychological $38.00 level. The breakout above $40.49 (July 1 high) confirms a short-term bullish structure.
Moving Average Theory
The 50-day moving average (circa $39.20) recently crossed above the 100-day MA (approximately $38.80), indicating strengthening intermediate momentum. Price trading above all three major MAs (50/100/200-day) signals a bullish posture. The 200-day MA near $38.30 now serves as critical trend support. This golden cross configuration typically precedes extended uptrends when confirmed by volume.
MACD & KDJ Indicators
The MACD histogram shows expanding bullish momentum, with both signal and MACD lines accelerating above the zero line. Concurrently, the KDJ oscillator registers an overbought reading (K:82, D:78, J:90), though such extremes can persist during strong trends. While this divergence between MACD strength and KDJ overbought conditions warrants monitoring, the primary momentum signal remains constructive.
Bollinger Bands
Price pierced the upper Bollinger Band ($40.80) during the July 8 rally, often indicating excessive near-term momentum. However, this occurred alongside expanding bands – a volatility signal that frequently precedes directional continuation. The preceding consolidation around $38-40 featured band contraction, suggesting accumulation. Current position favors upside follow-through toward $43.50 (1.5 standard deviation extension).
Volume-Price Relationship
The breakout was validated by volume 46% above the 20-day average, confirming institutional participation. Notable accumulation occurred near $37-38 (June-July), with distribution absent during the advance. The volume-weighted average price (VWAP) for the past three months sits at $39.80, now acting as dynamic support. Such volume confirmation increases confidence in the sustainability of this rally phase.
Relative Strength Index (RSI)
The 14-day RSI reading of 68 approaches overbought territory but lacks bearish divergence, as both price and RSI exhibit higher highs. While readings above 70 would suggest excessive momentum, the current positioning indicates strengthening trend intensity rather than exhaustion. Historical reactions near 75 RSI imply room for extension before significant consolidation.
Fibonacci Retracement
Measuring from the $36.37 June 20 low to the $41.85 July 8 high reveals critical retracement levels at $40.24 (23.6%), $39.41 (38.2%), and $38.61 (50%). These thresholds align with moving average support zones. The shallow 23.6% retracement at $40.24 represents the minimal pullback expectation before bullish continuation toward the 127.2% extension at $44.80.
Confluence exists between the Fibonacci 38.2% level ($39.41), 50-day moving average ($39.20), and volume shelf near $39.00, establishing a high-probability support zone. Conversely, the MACD-KDJ divergence and Bollinger Band penetration suggest near-term consolidation risk. However, the alignment of volume confirmation, moving average structure, and bullish candlestick patterns supports continuation toward the $43-45 resistance zone, contingent upon holding $40.24 during pullbacks.