Honda Motor Jumps 3.50% On Technical Breakout As Key Indicators Turn Bullish

Honda Motor (HMC) shares rose 3.50% in the latest session, closing at $32.56 on significantly higher volume of 1,242,300 shares after finding support near $31.38.
Candlestick Theory
Recent price action reveals key levels. The August 6th-7th formation (long green candle followed by a bearish engulfing pattern) signaled hesitation near $33 resistance. Yesterday’s strong bullish candle closing near session highs broke through the $32.50 congestion zone, establishing immediate support at $32.30 (prior swing high). The 2025 high of $34.40 (July 23rd) remains major resistance, while the August 12th low of $28.96 provides critical long-term support.
Moving Average Theory
Price recently reclaimed the 50-day SMA (~$30.80) after testing it as support on August 1st. The 100-day SMA (~$29.50) and 200-day SMA (~$28.90) slope upward, confirming the broader uptrend. Notably, the golden cross (50-day crossing above 200-day in June 2025) remains intact. Current trading above all key moving averages supports bullish near-term sentiment, though sustainability requires holding above the 50-day SMA.
MACD & KDJ Indicators
MACD shows bearish momentum fading as the histogram moderates near the zero line after a negative crossover. KDJ exited oversold territory (<20) on August 7th, with the %K line crossing above %D – triggering a buy signal that preceded the recent rally. However, KDJ (current: K=65, D=55) hasn’t reached overbought levels, suggesting room for further upside if momentum persists.
Bollinger Bands
Bands contracted sharply after the July 23rd volatility expansion, signaling reduced directional pressure. Price recently bounced off the lower band near $31.38, rallying to the upper band ($32.78). The breakout above the 20-period midline ($31.90) suggests bullish conviction, though close monitoring is needed for potential rejection at the upper band near $33.00.
Volume-Price Relationship
The July 23rd 13.12% surge occurred on extremely high volume (3.76M shares), validating that breakout. Recent gains (August 6th +2.40%, August 8th +3.50%) saw volume expand but remain below July’s peak, indicating moderate buying interest. Downward moves (July 30th -2.87%, August 7th -2.84%) saw lower volume, suggesting limited capitulation. Sustained bullishness requires higher volume confirmation on upward breaks.
Relative Strength Index (RSI)
The 14-day RSI (~59) resides in neutral territory, recovering from oversold conditions (<30) in late July but avoiding overbought extremes. It shows upward momentum without immediate exhaustion signals. Divergence occurred when price hit new highs in July (34.40) while RSI peaked lower than the June high – a cautionary sign that momentum may wane near the $34 resistance zone.
Fibonacci Retracement
Applying Fib levels between the July 23rd peak ($34.40) and December 20th, 2024 low ($23.89) reveals key thresholds: 38.2% retracement at $31.50 provided strong support in early August (price hit $31.38), while 23.6% ($32.90) aligns with yesterday’s high. The recent bounce from the 38.2% level reinforces its importance. Upside targets include the 23.6% retracement ($32.90) and eventually the July high ($34.40).
Confluence & Divergence Summary
Confluence exists near $31.50 (Fib 38.2% + July swing low) as validated support and $33.00 (psychological resistance + Bollinger upper band). The bullish moving average alignment, KDJ buy signal, and RSI recovery strengthen the case for near-term upside. However, notable divergence exists between MACD bearish momentum and price recovery, along with lower volume during recent advances versus the July surge. While technical structure leans positive, overcoming the $33.00-$34.40 resistance zone requires stronger volume and momentum confirmation to suggest a high-probability breakout.