Arm Holdings Surges 2.33% on 9-Day Winning Streak Gaining 22.23% as Technical Analysis Highlights Bullish Momentum

Arm Holdings (ARM) has surged 2.33% in the most recent session, extending a 9-day winning streak with a cumulative gain of 22.23%. This sharp upward momentum suggests a strong short-term bullish bias, warranting a detailed technical analysis to assess sustainability and potential reversals.

Candlestick Theory

The recent price action displays a series of higher highs and higher lows, indicating a robust uptrend. Key support levels can be identified at prior swing lows, such as the $150.38 (October 1) and $141.49 (September 30) levels, while resistance is likely near the $171.86 high from October 9. A potential bearish reversal pattern, such as a shooting star or inverted hammer, may emerge if the price consolidates near these upper bounds with a long upper shadow and small body. Conversely, a continuation pattern like a bullish engulfing could reinforce the trend if the next candle closes above the October 9 high.

Moving Average Theory

The 50-day moving average (approx. $155–$160) is currently above the 200-day MA (approx. $140–$150), forming a golden cross and confirming a medium-term bullish trend. The 100-day MA (approx. $150–$160) aligns with the 50-day MA, reinforcing the upward trajectory. However, the price’s recent surge above the 50-day MA suggests it may be overextended relative to its short-term moving averages, increasing the risk of a pullback to test the 50-day as a dynamic support.

MACD & KDJ Indicators

The MACD line has crossed above the signal line, with a positive histogram expanding, indicating strengthening momentum. However, the KDJ (Stochastic) oscillator shows the %K line at overbought levels (>80), while %D lags slightly behind, suggesting a potential divergence. This overbought divergence may signal a near-term correction, though the MACD’s bullish signal suggests the trend could persist.

Bollinger Bands

The price is currently near the upper Bollinger Band, reflecting high volatility. The bands have expanded significantly over the past two weeks, consistent with the sharp rally. A reversal below the middle band (20-day SMA) could trigger a contraction phase, potentially leading to a consolidation phase within the bands.

Volume-Price Relationship

Trading volume has surged during the rally, peaking at $1.46 billion on October 9, validating the price strength. However, recent volume has slightly declined while the price continues to rise, hinting at a potential volume divergence that could precede a pullback.

Relative Strength Index (RSI)

The 14-day RSI is approaching overbought territory (>70), aligning with the KDJ’s overbought signal. While this typically warns of a possible correction, the RSI’s sustained elevation suggests strong conviction in the trend. A failure to break above 70 and subsequent drop below 60 could confirm a short-term bearish shift.

Fibonacci Retracement

Key Fibonacci levels derived from the October 1 low ($150.38) to the October 9 high ($171.86) include 38.2% at $161.75 and 50% at $161.12. A pullback to these levels could attract buyers, while a breakdown below the 61.8% retracement ($157.50) would suggest a deeper correction.

Backtest Hypothesis

The backtest of the Hammer indicator (a bullish reversal pattern) from 2022 to 2025 yielded no positive short-term returns, with all win rates at 0.00%. This suggests that relying solely on the Hammer signal may not be effective for ARM. However, integrating it with the current analysis—such as combining it with RSI overbought warnings and Fibonacci retracement levels—could refine entry points. For instance, a Hammer pattern forming near the 38.2% Fibonacci level ($161.75) might offer a higher-probability trade if confirmed by a bullish MACD crossover and increasing volume. The maximum return of 14.92% on day 34 highlights the potential for longer-term holding periods, though short-term volatility remains a risk.