Teradyne's 12.79% Surge Extends Four-Day 18.65% Rally as Technical Indicators Signal Continuation

Candlestick Theory

Teradyne (TER) has exhibited a strong bullish trend in recent sessions, with a 12.79% surge on the most recent trading day, extending a four-day winning streak and a cumulative 18.65% gain. The candlestick pattern suggests a continuation of upward momentum, characterized by higher highs and higher lows. Key support levels appear to congregate around the 114–115 range, where the stock previously found buying interest during pullbacks. Resistance is forming at the 135–136 level, reflecting the current price action and the absence of significant bearish rejection. A break above 136.18 would likely target the 138–140 zone, which aligns with prior overbought levels. Conversely, a failure to hold above 114.32 may trigger a test of the 110–112 support cluster, where historical volatility expansion occurred.

Moving Average Theory

The 50-day moving average (approximately 120–122) and 100-day moving average (115–117) are currently well below the 200-day moving average (110–112), forming a bullish alignment. This suggests a medium-term uptrend with the short-term averages acting as dynamic support. The recent price surge has pushed the 50-day MA upward, narrowing the gap with the 100-day MA, which may signal accelerating momentum. However, the 200-day MA remains a critical threshold; a sustained close below this level would invalidate the long-term bullish case. Confluence between the moving averages and the 114–115 support zone increases the probability of a successful rebound should the stock face near-term profit-taking.

MACD & KDJ Indicators

The MACD histogram has shown positive divergence, with the fast line crossing above the signal line (a golden cross) during the recent rally, reinforcing the bullish bias. The KDJ stochastic oscillator, currently in overbought territory (K: 85, D: 78), suggests short-term exhaustion, but the strong price action indicates that the uptrend may persist despite the overbought reading. A bearish crossover in the KDJ could signal a potential pullback, but this must be validated by volume and price action. Divergence between the MACD and KDJ—where the MACD remains bullish while the KDJ shows weakening momentum—may foreshadow a near-term correction.

Bollinger Bands

Volatility has expanded sharply in recent sessions, with the stock price nearing the upper Bollinger Band (136.50) and the band width widening to 9.5%. This expansion suggests heightened trading activity and potential for further upward extension. The middle band (20-day SMA at ~124) acts as a dynamic reference point. If the price consolidates within the bands, the 135.18 level may serve as a temporary cap. A break above the upper band would signal a breakout trade, while a reversion to the middle band could trigger a retracement to the lower band (111.50).

Volume-Price Relationship

Trading volume has surged in tandem with the price rally, with the most recent session seeing 7.14 million shares traded—well above the 30-day average of 3.5 million. This validates the strength of the bullish move and suggests institutional participation. However, the sharp increase in volume during the 12.79% surge may also indicate profit-taking. A decline in volume during subsequent sessions without a price reversal would strengthen the case for continuation, whereas a surge in volume during a pullback could signal distribution.

Relative Strength Index (RSI)

The 14-day RSI stands at 72, indicating overbought conditions. While this alone does not necessarily signal a reversal, it highlights the risk of a near-term correction. Historical context shows that during similar overbought levels in late 2024, the stock experienced pullbacks of 5–7% before resuming the uptrend. A close below 60 would confirm weakening momentum, but the RSI’s failure to form a bearish divergence (price higher lows with RSI lower lows) suggests the trend remains intact.

Fibonacci Retracement

Key Fibonacci levels derived from the 104.23–166.19 range (identified in the backtest) include 138.2% (136.50) and 61.8% (130.50). The current price near 135.18 is approaching the 136.50 retracement level, which could act as a critical inflection point. A break above this level would target the 138.2% extension, while a rejection here may lead to a retest of the 61.8% level (130.50) as a potential support. Confluence between the 136.50 Fibonacci level and the upper Bollinger Band strengthens its significance.

Backtest Hypothesis

The MACD-based strategy (buy on golden cross, sell on death cross) demonstrated moderate efficacy in capturing Teradyne’s volatility, achieving a 5.6% gain from 2022 to 2025 compared to the S&P 500’s 3.5%. The strategy effectively navigated the stock’s sharp 2022 rally and 2023–2024 consolidation. However, its performance was heavily influenced by broader market trends, as evidenced by the delayed MACD signals during earnings-driven spikes. Integrating this strategy with Fibonacci retracement and volume analysis could enhance timing precision. For instance, entering on a MACD golden cross near key Fibonacci support (e.g., 114.32) and exiting on a death cross near overbought levels (136.50) would align with the current technical setup.