STMicroelectronics Stock Rises 2.48% As Technicals Signal Bullish Reversal

Candlestick Theory
Recent price action for STMicroelectronics shows a short-term bullish reversal pattern. The June 2nd session formed a Doji (open: 24.61, close: 25.05) following a 1.61% decline on May 30th, indicating indecision after a downtrend. This was confirmed by a strong bullish candle on June 3rd (+2.48%, high: 25.85), which established immediate resistance at 25.85. Support is visible at 24.54–24.55 (May 30th low), aligning with the April-June uptrend's base. The pattern suggests sellers exhausted momentum near support, with bulls regaining control.
Moving Average Theory
The 50-day moving average (MA) has trended upward since mid-April, currently at ~24.20, while the 100-day MA (~26.30) and 200-day MA (~27.80) remain in moderate downtrends. Crucially, the price crossed above the 50-day MA in early May and has since held it as dynamic support. However, it remains below the longer-term averages, signaling improving medium-term momentum but persistent long-term bearish pressure. A bullish MA crossover (50-day above 100-day) appears likely if the current uptrend persists.
MACD & KDJ Indicators
The MACD histogram turned positive in late May after a bullish crossover, with the signal line accelerating upward—confirming building bullish momentum. KDJ shows the %K line (79) crossing above %D (73) in overbought territory (>70), typically warning of overextension. However, both lines exhibit strong upward slopes, suggesting momentum may sustain near term. This divergence—overbought KDJ but strengthening MACD—implies bullish sentiment could persist briefly before potential profit-taking.
Bollinger Bands
Volatility expanded sharply in June, with the 20-day band width increasing 25% from May levels. Price recently tested the upper band (25.85 on June 3rd), reflecting strong bullish pressure. Historically, such tests preceded short-term consolidations (e.g., late April and late May). The current breakout above the 20-day SMA (~24.50) and midline retest support a bullish bias, though mean reversion risk is elevated near the upper band.
Volume-Price Relationship
Volume surged 68% to 7.57M shares on June 3rd’s 2.48% rally, confirming buyer conviction. Notably, volume expanded on each up day during the April rally (e.g., April 11th: 10.7M shares on +8.03%), validating accumulation phases. Conversely, the May 23rd decline (-3.06%) saw elevated volume (7.65M), signaling distribution. Recent volume-backed gains reinforce sustainability, while low-volume pullbacks (June 2nd: 4.49M) lack bearish conviction.
Relative Strength Index (RSI)
The 14-day RSI (~68) is approaching overbought territory but not yet extreme (>70). This follows a rise from oversold levels (<30) in early April, aligning with the 45% price surge from April lows. The RSI’s higher lows since April contrast with temporary price dips in May, demonstrating strengthening momentum. While an overbought signal may emerge soon, RSI divergence hasn’t materialized, suggesting near-term upside retention.
Fibonacci Retracement
Applying Fibonacci to the swing low ($17.25 on April 8th) and high ($25.85 on June 3rd), key retracement levels emerge: 23.6% ($24.27), 38.2% ($22.92), and 50% ($21.55). The May 30th dip tested $24.55—precisely above the 23.6% level—before reversing higher. This level now serves as critical support, with any breach targeting $22.92. The current hold above 23.6% reinforces the uptrend’s integrity.
Confluence & Conclusion
Technical confluence centers on the $24.27–24.55 zone (23.6% Fibonacci + 50-day MA + Bollinger midline), which validated as strong support. Bullish confirmation comes from volume-backed breakouts, rising MAs, and MACD momentum. Divergences exist in overbought KDJ and RSI nearing cautionary levels, warranting vigilance for pullbacks. Near term, a close above $25.85 could target the 100-day MA ($26.30), while failure to hold $24.55 might trigger consolidation toward $22.92. The weight of evidence favors continued upside, though volatility management is advised given overextended oscillators.