Honda Motor Jumps 3.09% As Technicals Signal Bullish Continuation

Honda Motor (HMC) rose 3.09% to close at $29.701 on 2025-06-27, marking its second consecutive day of gains with a cumulative 3.89% advance. This price action forms part of a broader technical context analyzed below.
Candlestick Theory
The recent sessions show a bullish engulfing pattern developing as the 3.09% white candle on 2025-06-27 completely consumed the prior day's smaller body, suggesting buyer dominance. Key resistance now resides near $30.07-$30.15, the February and May swing highs, while support sits at $28.57-$28.59, corresponding with the June 25 low and its associated hammer candle.
Moving Average Theory
The 50-day SMA ($29.48) recently crossed above the 200-day SMA ($28.92), forming a bullish "golden cross." Current trading above all three major moving averages (50/100/200-day) confirms an established intermediate uptrend. The 100-day SMA ($29.12) acts as dynamic support, with the slope alignment (50-day > 100-day > 200-day) validating positive momentum.
MACD & KDJ Indicators
MACD (12,26,9) shows a bullish crossover emerging above its signal line with histogram bars expanding positively. KDJ exhibits a bullish stance with K-line (72) and D-line (68) converging in overbought territory while the J-line (80) remains elevated. Though not deeply oversold recently, this alignment suggests continued upside potential in the near term.
Bollinger Bands
Price trades near the upper Bollinger Band ($29.85) following the band's recent expansion from contraction, signaling increasing volatility favoring bulls. The breakout from the tight consolidation range between $28.57 and $29.87 indicates directional conviction. Sustained trading above the 20-day moving average midline ($29.12) reinforces the bullish bias.
Volume-Price Relationship
The 15% above-average volume accompanying the latest up move validates the breakout, diverging from the declining volume observed during the preceding consolidation. Volume expansion during advances since June 24 contrasts with the high-volume sell-off on May 13, suggesting distribution has been absorbed by new buyers.
Relative Strength Index (RSI)
The 14-day RSI (62) holds in neutral territory after rebounding from oversold conditions near 30 in late May. While approaching overbought territory, it lacks divergence warnings with the current uptrend. Historical resistance near 70-75 during February and May rallies warrants monitoring if the advance continues.
Fibonacci Retracement
From the May high ($30.93) to June low ($28.57), key Fibonacci levels are $29.10 (38.2%), $29.75 (61.8%), and $30.25 (78.6%). The breakout above the 61.8% retracement signals strength, opening potential for a test of the full 100% retracement at $30.93. These levels now pivot as support near $29.75 (former resistance).
Confluence and Divergence
Multiple indicators align at $29.75: the 61.8% Fibonacci retracement, 20-day Bollinger midline, and recent breakout zone create a strong support confluence. A mild divergence exists where KDJ remains in overbought territory while RSI maintains neutrality, though MACD's bullish crossover and volume confirmation currently override this caution. The golden cross formation and Bollinger expansion both signal intermediate upside potential targeting the $30.07-$30.15 resistance zone. Probabilistically, the evidence favors continuation barring a close below $29.12 (100-day SMA and volume node).