AMX Surges 3.65% in Two Days, Extends 5.65% Uptrend on Bullish Breakout Signs

America Mobile (AMX) has experienced a 3.65% gain over the last two trading sessions, extending a 5.65% upward trajectory. This recent price action, observed in the candlestick pattern, suggests a potential continuation of bullish momentum, particularly if the breakout above the 21.3 resistance level holds. Key support levels, identified from prior lows, include 20.16 (September 19) and 19.91 (August 29), while resistance is clustered near 21.3 and 20.57 (September 22). The formation of a "Bullish Engulfing" pattern on the second day of the rally, coupled with volume expansion, strengthens the case for a near-term upward bias.

Candlestick Theory

The two-day rally has formed a "Higher High and Higher Low" structure, a classic sign of a bullish trend. The recent high at 21.3 could act as a psychological barrier, with a break above it likely to trigger further buying. Conversely, a pullback to 20.16 may test the resilience of the uptrend. The absence of bearish reversal patterns (e.g., "Shooting Star" or "Bearish Hikkake") at current levels suggests the bullish narrative remains intact for now.

Moving Average Theory

The 50-day moving average (approximately 18.8) and 200-day moving average (around 16.5) indicate a long-term bullish bias, as the price remains significantly above both. The 100-day MA (17.9) has been crossed by the 50-day MA, reinforcing the medium-term uptrend. However, the 50-day MA is approaching the 21.3 level, which may act as a dynamic resistance. A sustained close above this threshold would signal a shift in the medium-term trend toward stronger bullish momentum.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the MACD line crossing above the signal line on September 23, confirming a short-term bullish crossover. The KDJ oscillator shows K (82) and D (78) values, with J (88) suggesting overbought conditions. While this may hint at a potential pullback, the alignment of MACD and KDJ with the bullish trend increases the probability of a continuation rather than an immediate reversal. Divergence between the two indicators is absent, supporting a coherent short-term outlook.

Bollinger Bands

The current price of 21.3 sits near the upper Bollinger Band, indicating high volatility and potential exhaustion of the upward move. The 20-day Bollinger Band width has expanded from 0.5 to 1.0, suggesting increased uncertainty. A retest of the 20.57 mid-band level may occur if the upper band fails to hold, with the lower band at 20.05 acting as a critical support. A breakdown below this level would signal a shift in volatility and trend dynamics.

Volume-Price Relationship

Trading volume surged to 3.69 million on September 23, a 40% increase from the previous session, validating the price action. The volume profile shows a "volume climax" at the recent high, which could either confirm a breakout or warn of a distribution phase. However, the absence of a sharp decline in volume during the pullbacks (e.g., on September 19) suggests strong institutional participation, reducing the likelihood of a near-term reversal.

Relative Strength Index (RSI)

The RSI has reached 72, entering overbought territory. While this typically signals a potential pullback, the stock's strong trend (supported by moving averages and volume) suggests the overbought condition may persist for several more sessions. A close below 60 would trigger a bearish signal, but divergence between RSI and price action is not yet evident. Traders should monitor for a failure to retest the 70 level, which may precede a correction.

Fibonacci Retracement

The 23.6% and 38.2% Fibonacci retracement levels (19.8 and 19.5, respectively) have already been tested and cleared, with the 50% level at 19.2 acting as a key support. A breakdown below 19.2 would target the 61.8% level at 18.8, aligning with the 50-day MA. The current rally appears to be retracing from a key October 2024 low (16.00), with the 127% extension level at 21.5 indicating a possible target for further upside.

Backtest Hypothesis

The backtest of a strategy buying AMX when RSI exceeds 70 reveals mixed outcomes: a 54.79% win rate in 3 days, 53.42% in 10 days, and 36.99% in 30 days. While short-term holds benefit from the stock's momentum, the declining win rate beyond 10 days underscores the risk of overbought positions in a volatile market. The maximum return of 0.69% on day 50 highlights the strategy's limited profit potential, suggesting that exits should be prioritized within 3-5 days to capitalize on the bullish setup before the trend weakens. This aligns with the technical indicators, which favor early profit-taking to avoid potential reversals identified by RSI and Bollinger Band exhaustion.