ASML Shares Surge 6.37% on Bullish Pattern Amid Key Resistance Breakout

ASML Holding experienced a significant 6.37% surge on September 18, closing at 927.8 after trading as high as 938.68. This sharp upward move suggests strong institutional buying pressure, with the price forming a bullish engulfing pattern near prior resistance levels. Key support levels to monitor include the 872.27 (September 17 close) and 867.3 (September 15 close), while resistance remains at the recent high of 938.68. A break above 938.68 could target the next psychological level at 950, but a pullback to test the 872.27 support would validate the pattern’s integrity.

Moving Average Theory

The 50-day moving average (approximately 795-800) and 200-day MA (around 730-740) suggest a long-term bullish trend, with the 50-day MA crossing above the 200-day MA earlier in the year, signaling a potential “golden cross.” However, the recent 6.37% rally may push the 50-day MA closer to the current price, indicating short-term momentum is outpacing long-term averages. A close below the 100-day MA (~820) could trigger a reevaluation of the uptrend’s sustainability, while holding above the 200-day MA would reinforce a multi-month bullish bias.

MACD & KDJ Indicators

The MACD histogram has expanded positively, reflecting accelerating bullish momentum, with the signal line rising in tandem. The KDJ (Stochastic) oscillator shows overbought conditions (K-line at ~85, D-line at ~80), suggesting a potential pullback. However, the absence of bearish divergence between price and momentum indicators (e.g., higher highs with diverging RSI) weakens the likelihood of an immediate reversal. A stochastic crossover below the 80 level could signal a short-term correction, but the overall trend remains intact.

Bollinger Bands

Volatility has spiked, with the price nearing the upper Bollinger Band (938.68) on September 18. The band width has widened from prior contraction phases, indicating a breakout rather than a false move. If the price consolidates within the bands, the 927.8 level (current close) may act as a dynamic support/resistance pivot. A move below the lower band would invalidate the bullish case, though the recent volume surge (3.18 million shares) suggests strong conviction in the rally.

Volume-Price Relationship

Trading volume surged to 3.18 million shares on the 6.37% rally, validating the move’s legitimacy. However, volume has shown a slight tapering in subsequent sessions (e.g., 1.55 million on September 17), which may indicate waning momentum. A continuation of the uptrend would require sustained volume above 2 million shares per session. Divergences between volume and price could signal exhaustion, particularly if the price advances on shrinking volume.

Relative Strength Index (RSI)

The RSI is currently above 70, indicating overbought conditions. While this suggests a potential near-term correction, the RSI has remained in overbought territory for extended periods during ASML’s 2024 rally, implying the stock may tolerate elevated levels due to strong fundamentals. A drop below 60 would confirm a bearish signal, but a rebound above 70 without a price decline could indicate continuation of the bullish trend.

Fibonacci Retracement

Key Fibonacci levels from the 2025-06-04 low (640.69) to the 2025-09-18 high (938.68) include 61.8% at ~860 and 50% at ~789. A pullback to the 61.8% level would test intermediate support, while a break below 789 could trigger a deeper correction toward the 38.2% retracement (~740). The 200-day MA aligns with this level, creating a confluence of support.

Backtest Hypothesis

The backtested strategy of buying ASML when RSI exceeds 70 and exiting at a 5% profit or stop loss underperformed the benchmark by ~26.75%, with a Sharpe ratio of 0.25. This highlights the limitations of rigid overbought sell signals in a strong uptrend, as the stock often ignores overbought conditions due to sustained demand. The strategy’s maximum drawdown of 0.00% suggests it avoided losses during the rally, but its low volatility (40.24%) and conservative profit target likely constrained returns. A modified approach—holding through overbought phases while using Fibonacci levels for profit-taking—might better align with ASML’s momentum-driven behavior.