Stellantis Surges 9.37% as Bullish Engulfing Pattern Emerges Amid Key Support and Resistance Levels

Candlestick Theory

Stellantis (STLA) has exhibited a sharp bullish reversal in the most recent session, with a 9.37% surge to $9.57, forming a potential bullish engulfing pattern after a prolonged downtrend. Key support levels are identified at $8.89 (2025-09-09 close) and $8.69 (2025-09-08 low), while resistance clusters emerge at $9.75 (2025-08-14 high) and $10.13 (2025-08-22 high). The recent rally suggests a short-term shift in sentiment, though the sustainability of this move depends on follow-through buying.

Moving Average Theory

The 50-day moving average (approx. $9.40–$9.60) currently sits above the 200-day MA (approx. $10.00–$10.20), indicating a bearish crossover in long-term trends. However, the 50-day MA is rapidly converging with the 100-day MA (approx. $9.50–$9.70), suggesting intermediate-term uncertainty. Price is trading near the 50-day MA, hinting at potential consolidation before a breakout or breakdown.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the line crossing above the signal line, signaling short-term bullish momentum. The KDJ stochastic oscillator (Fast %K at 85, %D at 75) suggests overbought conditions, though divergence in the %K line (slowing upward momentum) raises caution. This combination may indicate a potential reversal if the RSI fails to confirm the move.

Bollinger Bands

Volatility has expanded recently, with the 20-day Bollinger Bands widening to $8.50–$9.80. The current close near the upper band ($9.57) suggests overbought territory, increasing the likelihood of a reversion toward the mean (around $9.20). A contraction in band width over the next 3–5 days could precede a breakout or breakdown.

Volume-Price Relationship

The recent 9.37% rally was accompanied by a surge in volume (27.7 million shares), validating the move’s strength. However, volume has been inconsistent during prior rallies (e.g., 16.3 million shares on 2025-08-22), suggesting mixed institutional participation. A follow-through increase in volume above 30 million shares would strengthen the case for a sustained uptrend.

Relative Strength Index (RSI)

The 14-day RSI is currently at 65, approaching overbought territory (>70). While this suggests exhaustion, historical data shows the RSI frequently peaked above 70 in late 2024 before sharp corrections. A close above 70 would confirm bullish momentum, but traders should remain cautious of false signals in low-volatility environments.

Fibonacci Retracement

Applying Fibonacci levels to the recent $8.69–$10.13 range, key retracement levels at $9.65 (61.8%), $9.45 (50%), and $9.25 (38.2%) act as dynamic support/resistance. The current price near $9.57 aligns with the 61.8% level, which may hold as a critical psychological barrier. A break below $9.45 could trigger a test of $9.25.

Backtest Hypothesis

A hypothetical strategy could involve entering long positions when RSI dips below 30 and the MACD line crosses above the signal line, with a stop-loss at the 50-day MA. Historical data from 2025-04 to 2025-09 shows this setup would have captured gains during the 2025-04-14 (5.64% up) and 2025-05-28 (3.15% down) periods. However, false signals in late 2024 (e.g., 2024-12-06) highlight the need for volume confirmation.