Sea Stock Rebounds 1.23% to 180.98 as Bullish Engulfing Pattern Signals Reversal

Sea (SE) advanced by 1.23% in the latest session to close at 180.98, rebounding from an intraday low of 173 after the prior session's 4.16% decline. This price action occurred amid moderate volume of 2.78 million shares, setting the stage for our technical assessment.
Candlestick Theory
A bullish engulfing pattern emerged over September 2nd-3rd, with the green candle completely overshadowing the prior day's red body. This reversal signal aligns with support at 173 (August 20th and September 3rd lows), while resistance remains near 188, where multiple August peaks (August 26th-27th) stalled progress. The 173-188 range establishes key reference boundaries.
Moving Average Theory
The 50-day moving average (near 172) provided dynamic support during the September 3rd dip, while the 100-day (155) and 200-day (135) averages maintain upward slopes, confirming the long-term bullish trend. Crucially, the 50-day holds above both longer-term averages, sustaining the golden cross pattern in effect since May 2025. This hierarchy of moving averages underscores persistent upward momentum despite recent consolidation.
MACD & KDJ Indicators
The MACD histogram has shifted toward convergence after September’s pullback, signaling diminishing bearish momentum. Concurrently, the KDJ oscillator exited oversold territory (K=20, D=18 on September 2nd), with the %K line crossing above %D – a short-term buy signal. This momentum recovery aligns with the candlestick reversal pattern, though MACD’s position below the signal line warrants monitoring for confirmation.
Bollinger Bands
Bollinger Bands contracted significantly in late August (bandwidth narrowed 20%), preceding the sharp September 2nd decline that breached the lower band. The subsequent rebound toward the midline (20-day SMA near 178) reflects normalization of volatility. A sustained move above the midline would signal bullish momentum resumption, while repeated lower-band tests could indicate underlying weakness.
Volume-Price Relationship
August 12th’s explosive 19.07% rally on record volume (19.4M shares) established a high-confidence support zone near 165-170. Conversely, the recent retreat toward 173 occurred on declining volume (-46% from August highs), suggesting limited conviction in the downside. However, the latest rebound lacked volume confirmation (below 30-day average), raising sustainability concerns that necessitate follow-through volume.
Relative Strength Index (RSI)
The 14-day RSI rebounded from nearly oversold levels (30.6 on September 2nd) to a neutral 52.5. This recovery from oversold territory supports the reversal thesis but does not yet indicate overbought pressure. RSI divergence was absent during the August-September decline, implying the correction lacked momentum deterioration – a subtle bullish nuance.
Fibonacci Retracement
Applying Fib levels to the rally from May’s low (135) to August’s peak (189), the 38.2% retracement (160) aligns precisely with the August 21st bounce. The 50% level (153) converges with the 100-day moving average, creating a major support floor. Current price action holds above the 38.2% level, maintaining structural integrity for the broader uptrend.
Confluence and Divergence
Notable confluence exists at 160-165, where the 100-day MA, 38.2% Fib, and the August 12th gap support intersect. This zone underpins the bullish structure. The only material divergence emerged in late August when price achieved new highs while RSI formed a lower peak – now resolved by the recent correction. Volume’s failure to confirm the latest rebound introduces mild caution but remains within normal retracement parameters.
In summary, Sea displays constructive technical positioning, with the bullish engulfing pattern, KDJ signal, and MA support at 172-173 suggesting downside containment. A decisive break above 188 resistance on expanding volume would validate bullish resumption, while failure to hold 173 may retest the 160-165 confluence zone. The alignment of moving averages and Fib support favors upside resolution probabilistically.