Williams-Sonoma Rises 4.02% in Two Days as Technicals Signal Bullish Reversal

Technical Analysis of Williams-Sonoma (WSM)
Williams-Sonoma (WSM) concluded the most recent session at $170.20, rising 3.15% and extending gains to 4.02% over two consecutive trading days. This rebound follows a sharp decline on July 15th (-4.01%), suggesting a potential near-term reversal. The analysis below integrates multiple technical frameworks to assess the stock’s trajectory.
Candlestick Theory
The price action reveals a bullish reversal pattern emerging near the $161.76–$165.58 support zone established on July 16th–17th. The July 17th session formed a robust bullish candle closing near its high ($171.32) after two days of recovery, invalidating the prior bearish momentum. Key resistance resides at $172.20–$175.68, aligning with the July 15th high and the June 27th peak. A sustained breach above $172.20 could signal further upside, while failure risks retesting $165 support.
Moving Average Theory
The 50-day moving average (approximated at $168–$170) recently capped upside, but the price closed above this level on July 17th. More critically, the 100-day and 200-day moving averages (estimated near $160 and $150, respectively) maintain upward slopes, indicating intact long-term bullish structure. The current bounce above the 50-day MA, if confirmed, may reinforce short-term bullish sentiment, though a close below $168 would undermine this signal.
MACD & KDJ Indicators
The MACD histogram shows nascent bullish convergence as the July 17th rally narrows the gap between the MACD and signal lines following oversold conditions. KDJ’s %K line has crossed above %D from sub-30 territory, reflecting strengthening momentum after recent oversold extremes. Both oscillators align in suggesting a potential short-term trend reversal, though confirmation requires MACD crossing the signal line decisively.
Bollinger Bands
Volatility expanded sharply during the July 15th sell-off, with price breaching the lower band. The subsequent rebound has normalized the price within the bands ($165–$175), and the bands themselves are tightening, implying reduced near-term volatility. A consolidation phase appears likely, with $175 acting as upper resistance and $165 as lower support.
Volume-Price Relationship
Volume surged to 1.54M shares during the July 15th decline, validating bearish momentum. However, the recovery on July 16th–17th occurred on above-average volume (1.08M and 1.34M shares, respectively), supporting the reversal’s credibility. This volume profile suggests accumulation at support levels, increasing confidence in the rebound’s sustainability.
Relative Strength Index (RSI)
The 14-day RSI rebounded sharply from near-oversold levels (approaching 30) to around 55 after the two-day rally. While not yet overbought, this swift recovery underscores improving momentum. Traders should monitor for potential overbought signals (RSI >70) on extended gains, though RSI’s current position implies room for further upside.
Fibonacci Retracement
Using the swing high of $176.50 (July 10th) and low of $161.76 (July 16th), key Fibonacci levels highlight $167.50 (38.2%) and $170.80 (61.8%) as immediate hurdles. The stock closed just below the 61.8% retracement at $170.20. A decisive breakout above $170.80 could accelerate momentum toward the 78.6% level ($173.30), while failure here may trigger a pullback toward the 50% level ($169.10).
Concluding Assessment
Multiple indicators converge at the $168–$170 zone, with moving averages, Fibonacci resistance, and Bollinger mid-band alignment amplifying its technical significance. The bullish candlestick reversal, volume-supported recovery, and momentum oscillator alignment suggest a high-probability short-term upside bias if $170.80 is breached. Divergence is minimal, though extended gains may face headwinds near $173–$175 resistance. Traders should prioritize confirmation above $170.80 for entry, with a stop-loss below $168 should bearish sentiment resurface.