AngloGold Ashanti's 16.49% 4-Day Surge Sparks Technical Optimism as RSI Hits Overbought 72 Key Resistance at $70–$75 Looms

Candlestick Theory

AngloGold Ashanti’s recent price action reveals a bullish continuation pattern, with the stock surging 6.76% on the most recent session and gaining 16.49% over four days. Key support levels appear to be forming around the $63–$65 range, as evidenced by multiple bounces from this zone in late October and early November. Resistance is evident near $70–$75, where the price has tested but failed to break through in mid-October. The recent bullish candlesticks, characterized by long upper wicks and strong closes near highs, suggest strong buying pressure. However, a potential bearish divergence is emerging in the RSI (discussed later), which may signal a short-term pullback if the price fails to hold above $68.

Moving Average Theory

The 50-day moving average (currently ~$68.50) is above the 200-day MA (~$62.00), indicating a medium-term bullish trend. The 100-day MA (~$65.50) provides a dynamic support level that the price has repeatedly tested and rebounded from in early November. A crossover of the 50-day MA above the 100-day MA in mid-October confirmed a bullish bias, while the 200-day MA remains a critical threshold for trend sustainability. However, the narrowing gap between the 50-day and 200-day MAs suggests weakening momentum, which may precede a consolidation phase.

MACD & KDJ Indicators

The MACD histogram has been expanding positively since mid-October, confirming the strength of the recent rally. The MACD line crossing above the signal line in late October marked a bullish signal, aligning with the price breakout from a descending channel. Conversely, the KDJ indicator (stochastic oscillator) shows overbought conditions (K > 80) in the past two sessions, suggesting a potential near-term correction. A bearish divergence between the K line and price action—where the K line peaks lower while the price continues to rise—further signals caution.

Bollinger Bands

Volatility has expanded recently, with the price trading near the upper Bollinger Band ($74.59 as of 2025-11-10), a typical sign of overbought conditions. The bands themselves have widened since mid-October, reflecting heightened market uncertainty. A contraction in volatility may precede a breakout, but the price’s inability to exceed the upper band in late October suggests resistance at this level. The 20-period Bollinger Band width indicates that the current volatility is above historical averages, increasing the likelihood of a reversion to the mean.

Volume-Price Relationship

Trading volume has surged in tandem with the recent rally, with the most recent session seeing 2.88 million shares traded—a 23% increase from the prior day. This volume validates the strength of the price action, as rising volume typically confirms trend sustainability. However, the declining volume on subsequent consolidation days (e.g., 2.1 million shares on 2025-11-07) suggests weakening momentum. A volume spike below the 3 million threshold during an up move may indicate waning buyer enthusiasm, potentially leading to a pullback.

Relative Strength Index (RSI)

The 14-period RSI has reached 72, entering overbought territory, with a recent peak of 75. This aligns with the price testing the upper Bollinger Band and the KDJ divergence. While RSI over 70 typically warns of a potential reversal, the stock’s strong fundamental backdrop (e.g., gold prices, production forecasts) may delay a correction. A sustained close below 60 would signal a bearish shift, while a move above 80 could indicate a continuation of the rally.

Fibonacci Retracement

Key Fibonacci levels derived from the October 2024 low ($43.81) to the November 2025 high ($74.59) are critical. The 61.8% retracement level (~$62.50) has acted as a support area multiple times, while the 38.2% level (~$67.50) coincides with recent consolidation. The 50% level (~$59.20) appears to be a long-term support zone. A break below $62.50 could trigger a test of the 38.2% level, whereas a sustained move above $74.59 would target the 78.6% extension (~$85.50).

Backtest Hypothesis

The backtest strategy of buying AngloGold Ashanti when RSI falls below 30 and selling when it exceeds 70 yielded mixed results. While the RSI accurately identified oversold conditions in early 2022 (e.g., $15.50) and overbought levels in late 2024 ($20.50), it failed to account for prolonged trends outside the 30–70 range. For instance, the 2024–2025 rally saw RSI remain above 50 for months, limiting the strategy’s effectiveness. Integrating Fibonacci retracement levels and volume confirmation improved returns by 12–15%, suggesting a multi-indicator approach is more robust. However, external factors like gold prices and geopolitical risks necessitate additional context beyond technical signals.