Arm Holdings Surges 11.56% on Bullish Technical Indicators Three-Day Rally Nears 18.32%

Arm Holdings (ARM) has surged 11.56% in the most recent session, extending a three-day rally with a cumulative gain of 18.32%. This sharp upward movement, coupled with elevated trading volumes (e.g., 15.79 million shares on 2026-02-06), suggests strong short-term bullish momentum. The price action forms a candlestick pattern resembling a "Bullish Abandoned Baby" over the last three days, indicating a potential reversal from prior bearish pressure. Key support levels can be identified at $100.02 (2026-02-05 low) and $104.55 (2026-02-03 low), while resistance appears near $115.10 (2026-02-05 high) and $124.31 (2026-02-06 high).
Moving Average Theory reveals a short-term bullish bias. The 50-day MA (calculated from the 1-year data) is likely above the 200-day MA, suggesting a medium-term uptrend. However, the 200-day MA may act as a critical support level if the recent rally falters. The 100-day MA could serve as a dynamic resistance zone, given the stock’s recent proximity to it.
MACD & KDJ Indicators signal overbought conditions. The MACD histogram has expanded positively, with the line above the signal line, reinforcing upward momentum. Meanwhile, the KDJ (Stochastic oscillator) shows %K and %D converging near overbought territory (above 80), which may foreshadow a pullback. Divergence between price highs and oscillator peaks could hint at a near-term reversal risk, though the strong volume validates the current rally.
Bollinger Bands demonstrate contracting volatility prior to the recent surge, a precursor to a breakout. The price has since surged to the upper band, suggesting overbought conditions. If the bands begin to widen, it may indicate renewed volatility, either through a continuation or a correction.
The Volume-Price Relationship aligns with the bullish narrative. The recent rally coincided with surging volume, which validates the strength of the move. However, a tapering of volume during subsequent consolidation could weaken the sustainability of the upward trend.
RSI has likely crossed into overbought territory (>70), a common warning signal for potential corrections. While this does not guarantee an immediate reversal, it underscores the need for caution. A failure to retrace below key RSI levels (e.g., 60) may prolong the bullish phase.
Fibonacci Retracement levels drawn from the recent high of $124.31 and a major low (e.g., $100.02) highlight critical zones. The 38.2% retracement (~$115.50) and 50% retracement (~$112.16) may act as support, while the 61.8% level (~$108.00) could trigger a deeper correction if breached.
Confluence of indicators points to a high-probability scenario of short-term continuation, supported by volume and moving average alignment, but caution is warranted due to overbought conditions and potential KDJ divergence. Divergences between MACD and price action could signal a bearish twist if the rally stalls near key resistance.

The technical landscape for ARM reflects a strong short-term bullish setup, with multiple indicators converging on the upside. However, overbought metrics and historical volatility patterns suggest that a consolidation phase or pullback may be imminent, particularly if volume wanes or key Fibonacci levels fail to hold. Traders should monitor the 50-day MA and $115.50 support level for early signs of trend sustainability.