On Semiconductor Surges 6.18% on Strong Volume, Technical Indicators Signal Uptrend Continuation

On Semiconductor (ON) Technical Analysis

Candlestick Theory

On Semiconductor’s recent 6.18% surge on 2025-08-12 closed near the session’s high of $51.23, forming a strong bullish candlestick. Key support levels include the $47.1–$47.24 range (from August 5–11) and $46.34–$46.98 (August 4–6), while resistance is clustered at $47.97–$54.84 (August 4–8). A bearish engulfing pattern on August 4–5 (a 15.58% drop) suggests potential caution if the price retests $47.1–$47.24.

Moving Average Theory

Short-term momentum is bullish, with the 50-day MA likely above the 200-day MA, indicating an uptrend. However, the 100-day and 200-day MAs may remain elevated, suggesting longer-term consolidation. A crossover of the 50-day below the 200-day would signal bearish exhaustion, but current data shows the price above all three MAs, reinforcing short-term strength.

MACD & KDJ Indicators

The MACD histogram has likely turned positive, reflecting bullish momentum, while the KDJ stochastic oscillator (typically at 80–100) indicates overbought conditions. However, the KDJ’s divergence (price rising while %K declines) on August 8–12 suggests potential exhaustion. A bearish crossover in the KDJ may precede a pullback, but MACD’s strength implies trend persistence unless the 200-day MA is breached.

Bollinger Bands

Volatility has expanded recently, with the price near the upper band following the August 12 rally. A contraction in band width on August 4–5 preceded the sharp drop, signaling a potential breakout. Current positioning near the upper band suggests overbought conditions, but the trend remains intact unless the lower band ($46.34–$47.1) is tested.

Volume-Price Relationship

The recent surge was accompanied by a 13.4 million share volume, significantly higher than the 7.8 million average in mid-August. This validates the price action’s strength. However, declining volume on subsequent days (e.g., 8.3 million on August 11) may indicate waning momentum, suggesting a potential pause in the uptrend.

Relative Strength Index (RSI)

RSI has likely surged above 70, confirming overbought conditions. While this typically signals a potential pullback, historical context is critical. The backtest strategy notes that RSI overbought conditions have historically led to underperformance, with a maximum return of -0.03%. This caveat implies caution, as overbought readings may not guarantee reversals but highlight risk.

Fibonacci Retracement

Key Fibonacci levels from the August 4–5 decline ($54.84 peak to $47.1 low) include 23.6% ($51.56) and 38.2% ($50.62). The current price near $50.01 is close to the 38.2% level, which may act as a support. A break below $47.1 would target the 61.8% retracement at $45.39, aligning with prior troughs.

Backtest Hypothesis

The backtest strategy highlights the historically poor performance of RSI overbought conditions (RSI >70) since 2022, with a maximum return of -0.03%. This suggests that entering long positions during overbought RSI conditions may be contraindicated. For On Semiconductor, if RSI remains above 70 and volume declines, a short-term reversal is probable. A potential trade could involve shorting at $51.23 with a stop-loss above $51.56 (Fibonacci 23.6%) and a target at $47.1 (prior support). However, confluence with moving averages and volume remains bullish, implying the trend may persist unless multiple indicators align bearishly.