Bloom Energy's 9.58% Surge Driven by Bullish Engulfing Pattern and Golden Cross Crossover

Candlestick Theory

Bloom Energy’s recent price action reveals a strong bullish bias, with a 9.58% surge in the latest session closing at $141.41. Key support levels are identified at $128.01 (prior low) and $121.30 (lower breakout level), while resistance clusters form at $146.45 (recent high) and $139.88 (previous consolidation level). A bullish engulfing pattern is evident around October 31–November 4, where the candle closed near its high, confirming buying pressure. The price has also tested the $133.30–$135.01 range multiple times, suggesting a potential breakout if it sustains above $135.01.

Moving Average Theory

Short-term momentum aligns with a bullish trend, as the 50-day moving average (calculated from the last 50 closing prices) is above the 200-day MA, forming a “golden cross” structure. The 100-day MA is currently at $119.50, while the 200-day MA sits at $108.20, indicating a medium-term upward bias. However, the 50-day MA is approaching the 100-day MA, which may signal a potential flattening of the trend if the price consolidates near $140. The 200-day MA provides a critical baseline for trend sustainability, with a break below $105.84 (October 28 low) risking a shift to a bearish bias.

MACD & KDJ Indicators

The MACD histogram shows a recent expansion, with the MACD line (12,26) crossing above the signal line, confirming short-term bullish momentum. The KDJ oscillator (14-period) indicates overbought conditions, with the K-line at 85 and the D-line at 78, suggesting a potential pullback. However, the J-line at 102 hints at aggressive buying pressure. Divergence between the MACD and price action (e.g., a higher high in price but lower MACD peak) may signal weakening momentum, but the current alignment of MACD and bullish candlestick patterns suggests continuation rather than reversal.

Bollinger Bands

Volatility has spiked, with the price near the upper Bollinger Band ($146.45) in the most recent session. The band width has expanded from a contraction observed on October 24–27, indicating a breakout phase. The price’s proximity to the upper band, combined with a 20-day standard deviation of $9.10, suggests heightened risk of a mean reversion. However, the volume surge (14.96M shares) on the breakout day validates the move, reducing the likelihood of an immediate reversal.

Volume-Price Relationship

Volume has surged on the most recent rally, with a 14.96M share turnover, exceeding the 10-day average volume of 12.5M. This confirms institutional participation and strengthens the validity of the breakout. However, a divergence emerges on October 30, where the price fell 4.38% on declining volume (18.00M), suggesting weak bearish conviction. The current volume profile indicates a healthy balance between buying and selling pressure, with no immediate signs of exhaustion.

Relative Strength Index (RSI)

The 14-day RSI is at 93.89, well into overbought territory (>70), signaling a potential correction. Historical RSI readings (e.g., 86.89 on October 13 and 85.03 on October 23) suggest a pattern of overbought levels preceding pullbacks. However, the RSI has not yet reached its peak (93.89), and the price remains above key moving averages, implying a continuation of the trend rather than a reversal. Traders should monitor a drop below 70 for a bearish signal, though a pullback to 65–70 may offer a re-entry opportunity.

Fibonacci Retracement

Key Fibonacci levels derived from the October 30–November 4 swing high ($146.45) and low ($128.01) are:

- 23.6% retracement: $139.95

- 38.2% retracement: $136.20

- 50% retracement: $137.23

The current price of $141.41 is approaching the 23.6% level, which may act as immediate resistance. A break above $146.45 could target the 61.8% retracement at $140.80, but a failure to hold above $137.23 would invalidate the bullish case.

Backtest Hypothesis

A backtest of a RSI-based strategy (buy at RSI <30, sell at RSI >70) from 2022 to 2025 would likely yield low success due to Bloom Energy’s volatility and overbought/oversold extremes. For instance, the stock’s RSI surged to 93.89 in recent sessions, far exceeding the 70 threshold, yet the price continued upward, suggesting RSI divergence. Historical data shows the RSI rarely lingered in overbought/oversold zones long enough for the strategy to execute profitably. Adjustments to the strategy—such as incorporating volume confirmation or Fibonacci levels—might improve efficacy, but the stock’s trend-driven nature (as indicated by moving averages and Bollinger Bands) implies that trend-following strategies could outperform RSI-based countertrend approaches.