Atlassian Stock Surges 6.31% to $218.60 on Bullish Breakout and Volume Spike

Candlestick Theory
Atlassian's recent price action shows a strong bullish breakout, with the latest session forming a long green candle closing near $218.60 after breaching the $215 resistance (May 29 high). This completes a "Three White Soldiers" pattern over three consecutive sessions, signaling robust momentum. Key support resides at $210 (tested on June 4 and June 2), while resistance now shifts to the psychological $220 level. The absence of upper wicks in recent candles suggests sustained buying pressure, though proximity to $220 may invite short-term profit-taking.
Moving Average Theory
The stock trades above all critical moving averages (50-day ~$212.50, 100-day ~$208, 200-day ~$204), confirming a long-term uptrend. A Golden Cross emerged in early May as the 50-day crossed above both the 100-day and 200-day MAs. Recent price consolidation near the 50-day MA in late May provided a springboard for the current rally. The aligned upward slope of all three averages reinforces bullish sentiment, though the 7% premium over the 50-day MA may precede consolidation.
MACD & KDJ Indicators
The MACD histogram has turned positive (signal line crossover at -1.2), reflecting accelerating upward momentum. KDJ readings (K: 75, D: 68, J: 89) approach overbought territory but lack bearish divergence. While KDJ's J-line nears 90, the absence of divergence from price action suggests strength rather than immediate reversal risk. Both oscillators align in signaling short-term bullish continuation, though KDJ’s proximity to overbought levels warrants monitoring for exhaustion.
Bollinger Bands
Price currently rides the upper Bollinger Band (~$218), coinciding with a volatility expansion after the bands contracted sharply in late May (bandwidth narrowed to 4.5%). This "squeeze" resolution to the upside supports the breakout thesis. Sustained trading above the upper band may indicate overextension, but consecutive closes near this level reinforce bullish conviction. Band support now rises to $210 (20-day SMA), aligning with candlestick-defined support.
Volume-Price Relationship
The breakout was validated by rising volume: The latest session’s volume (2.68M shares) exceeded the prior two days' average by 40% and marked the highest volume since May 12. This volume surge on upward price action confirms institutional participation. Notably, the May 31 downswing saw elevated volume (4.42M shares), establishing $215 as a key resistance-turned-support level, now reinforced by the current volume-backed breakout.
Relative Strength Index (RSI)
The 14-day RSI reads 62, hovering near the midpoint (50) after rebounding from oversold conditions in mid-May. Current momentum lacks overbought pressure (RSI < 70), leaving room for further upside. However, the RSI’s failure to reach extreme oversold levels during May’s dip suggests underlying strength, reducing reversal risks. Divergence is absent, as RSI progression aligns with the price recovery.
Fibonacci Retracement
Applying Fibonacci to the downtrend from the February high ($285.99) to June low ($156.02):
- 23.6% retracement ($195) was breached decisively in early June.
- 38.2% level ($214) was surpassed in the latest session.
- The 50% retracement ($220) aligns precisely with the June 5 close ($218.60), creating immediate resistance.
A confirmed break above $220 could target the 61.8% retracement ($227). The $210 support converges with the 23.6% Fibonacci level, strengthening its technical significance.
Confluence & Divergence Observations
Confluences:
- The $210 support aligns with the 23.6% Fibonacci level, 100-day MA, and Bollinger Band midline.
- Breakout confirmation from volume surge, MACD crossover, and candlestick patterns.
Divergences:
- Mild negative divergence in KDJ (J-line flattening) versus MACD’s rising histogram, suggesting near-term consolidation risk at $220 resistance. However, volume and RSI lack bearish signals.
Synthesis
Atlassian exhibits strong bullish momentum, supported by volume, moving averages, and breakout patterns. Confluence at $220 Fibonacci/psychological resistance may trigger consolidation, but sustained volume-backed trading above this level could extend gains toward $227. The primary risk remains profit-taking after the 6.31% 3-day surge, with $210 acting as critical support. Absence of overbought RSI readings and bearish divergences suggests pullbacks may be shallow, presenting potential accumulation opportunities.