Blackstone's 4.32% Surge Sparks Bullish Candlestick Signal as MACD Crosses Up, RSI Hits Overbought Levels

Candlestick Theory

Blackstone’s recent 4.32% surge to $170.50 forms a strong bullish candlestick, suggesting short-term buying momentum. Key support levels are identified at $163.77 (August 21 low) and $162.69 (August 20 low), while resistance clusters near $172.48 (August 19 high) and $175.51 (August 15 high). A potential bullish engulfing pattern emerges if the prior bearish candle (August 21) is fully covered by the recent rally, signaling a possible reversal from a downtrend. However, the absence of a clear bearish trend prior to the rally weakens the reversal signal, suggesting the move may instead reflect continuation of a broader consolidation phase.

Moving Average Theory

The 50-day moving average (calculated as $167.20 based on recent data) currently sits below the 100-day ($169.80) and 200-day ($166.40) averages, indicating a mixed short-term trend. The price crossing above the 50-day MA on August 22 suggests a potential breakout, but the 100-day MA remains a critical threshold to watch for sustainability. The 200-day MA acts as a long-term support, and the current price’s proximity to it ($170.50 vs. $166.40) implies a strong bullish bias for the intermediate term. A break above the 100-day MA would confirm a multi-timeframe alignment toward an uptrend.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the line crossing above the signal line on August 22, confirming a bullish momentum shift. However, the KDJ stochastic oscillator (K at 82.3, D at 78.1) indicates overbought conditions, suggesting a near-term pullback risk. Divergence between the MACD’s strength and the KDJ’s overbought warning highlights a potential short-term correction before a resumption of the uptrend. The RSI (discussed below) reinforces this overbought caution.

Bollinger Bands

Volatility has expanded, with the price touching the upper Bollinger Band ($172.48) on August 22. This contraction-expansion pattern suggests heightened short-term uncertainty. While the upper band breakout could signal continuation of the rally, the 20-day historical volatility (1.5%) remains moderate, limiting the likelihood of an explosive move. The price’s position near the upper band, coupled with the KDJ overbought signal, increases the probability of a retest of the middle band ($168.50) as a potential support.

Volume-Price Relationship

The recent rally was accompanied by a surge in volume (5.19 million shares), validating the strength of the move. However, volume declined on the prior session’s bearish close (August 21), indicating weakening bearish conviction. The current volume profile suggests healthy demand, but a follow-through rally would require sustained volume above 5 million shares. If volume contracts on further gains, it may signal waning momentum.

Relative Strength Index (RSI)

The RSI has spiked to 72.4, entering overbought territory, which aligns with the KDJ’s warning. While this does not necessarily predict an immediate reversal, it suggests caution for near-term traders. A close below the 60 level would indicate a shift in momentum, but the RSI’s divergence from price (e.g., lower highs in RSI despite higher price) hints at potential exhaustion.

Fibonacci Retracement

Key Fibonacci levels derived from the May–August rally (low of $131.71 to high of $175.51) include 38.2% at $160.10 and 50% at $153.61. The current price of $170.50 suggests a shallow retracement from the August 15 high ($175.51), with the 23.6% level ($173.20) acting as a potential resistance. A breakdown below the 61.8% level ($146.20) would invalidate the bullish case.

Backtest Hypothesis

A strategy based on MACD golden crosses and 20-day holding periods for Blackstone has shown mixed results over recent years. From 2022 to the present, this approach generated a 5.56% return, underperforming the S&P 500’s 21.04% gain. The 30-day extension improved returns to 9.01%, yet still lagged the broader market. This suggests that while the MACD signal captures some momentum, it lacks robustness in a market environment characterized by macroeconomic volatility and sector rotation. Integrating Fibonacci retracement levels or RSI divergence filters could enhance the strategy by avoiding overbought entries and improving risk-reward profiles.