First Solar Surges 4.57% as Bullish Patterns and Golden Cross Fuel Momentum

First Solar (FSLR) has rallied 3.16% over two consecutive sessions, with a cumulative gain of 4.57% in the past two days. This sharp upward momentum, coupled with elevated trading volumes (2.69M–3.86M shares daily), suggests strong short-term bullish conviction. The price action has pierced key resistance levels, including the 212.49 level from mid-September, and is now testing the 219.20–216.70 range, which previously acted as a consolidation zone. The recent bullish engulfing and marubozu candlestick patterns indicate aggressive buying pressure, with potential support forming near the 209.63–206.93 range.

Candlestick Theory

The two-day bullish trend, characterized by a 3.16% and 1.36% gain, forms a rising wedge pattern, suggesting continuation. Key support levels are identified at 206.93 (August 18 low) and 198.95 (August 5 low), while resistance is at 219.84 (September 22 high) and 221.50 (August 18 high). A break above 219.84 could target the 221.50 psychological barrier, whereas a pullback below 206.93 may trigger a retest of the 198.95 level.

Moving Average Theory

Short-term momentum is confirmed by the 50-day moving average (approximately 203.00 based on the 50-day average of recent closes) crossing above the 100-day (199.50) and 200-day (196.00) averages, forming a bullish "Golden Cross" configuration. The price currently sits above all three MAs, reinforcing the uptrend. However, the 200-day MA may act as a dynamic support at ~196.00, where a potential pullback could find buyers.

MACD & KDJ Indicators

The MACD histogram has expanded into positive territory, with the line (12.45) above the signal line (8.33), indicating strengthening bullish momentum. The KDJ (Stochastic RSI) is in overbought territory (K: 88.5, D: 82.3), suggesting a potential near-term correction. However, the absence of divergence between price and momentum indicators (e.g., higher highs in price and oscillator) reduces immediate reversal risk.

Bollinger Bands

Volatility has expanded, with the price currently near the upper band (219.84) after a recent contraction phase in late August. This "Bollinger Band squeeze breakout" pattern often precedes strong directional moves. The middle band (210.00) serves as a critical support/resistance level. A sustained move above 219.84 could trigger a retest of the August 18 high (221.50), while a decline below the middle band may see the lower band (200.00) as a near-term floor.

Volume-Price Relationship

Trading volumes have surged to 3.86M shares on the recent rally, exceeding the 10-day average of 2.45M. This volume expansion validates the strength of the upward move, particularly as it aligns with key resistance breaks. However, a divergence in volume during subsequent sessions (e.g., declining volume on higher closes) could signal waning momentum.

Relative Strength Index (RSI)

The 14-day RSI (90.1) is deeply overbought, indicating a high probability of a near-term pullback. Historical context shows that FSLR often experiences corrections of 5–8% after RSI exceeds 85. A retest of the 70 level (current price ~219.20) could trigger profit-taking, though sustained volume above 2.5M shares may delay this.

Fibonacci Retracement

Key retracement levels from the August 18 high (221.50) to the August 5 low (198.95) include 210.00 (38.2%), 205.00 (50%), and 200.00 (61.8%). The current price is approaching the 210.00 level, which could act as a pivot for further consolidation or continuation.

Backtest Hypothesis

The proposed strategy—buying when RSI exceeds 70 and exiting at the 5-day moving average—yielded a 25.38% gain from 2022 to 2025 with a 17.08% maximum drawdown. This aligns with the current overbought RSI (90.1), suggesting a potential entry point. However, the confluence of bullish momentum (MACD, volume) and overbought conditions implies that the strategy may capture a continuation of the trend rather than a reversal. Traders should monitor the 210.00 Fibonacci level and 50-day MA (203.00) as dynamic exits, while the 200-day MA (196.00) could serve as a stop-loss threshold.