Carrier Global Gains 3.10% for Second Session as Technical Indicators Signal Bullish Momentum

Carrier Global (CARR) is currently trading at $65.51, up 3.10% for the second consecutive session, with a 4.87% gain over two days. The recent price action suggests a potential consolidation phase following a volatile correction earlier in September, with key technical levels emerging as focal points for near-term directionality.

Candlestick Theory

The recent two-day bullish pattern forms a twin candlestick structure, with the second session confirming the first by closing near the high. This suggests short-term buyer momentum, though the absence of a decisive breakout above the 65.63 resistance (former high from September 5) indicates a potential test of psychological levels. Key support is identified at $63.50 (August 29 low) and $62.45 (September 3 low), with a breakdown below these levels risking a retest of the 60.82 pivot (June 18 low). A bullish engulfing pattern on September 5 also hints at a possible reversal from the August–September selloff, though volume must confirm the shift.

Moving Average Theory

The 50-day moving average (DMA) currently sits at ~$68.50, well above the 200-DMA (~$65.00), indicating a medium-term bullish bias. However, the 100-DMA (~$67.00) acts as a near-term overhead hurdle, with the price failing to close above it since mid-August. This divergence suggests a potential tug-of-war between short-term buyers and medium-term sellers. A sustained close above the 50-DMA would align with a bullish trend continuation, while a breakdown below the 200-DMA could trigger deeper corrective waves.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the line crossing above the signal line on September 4–5, signaling a short-term bullish crossover. However, the RSI-based KDJ indicator (with 14-period settings) shows the stochastic %K (~65) diverging from the price, which is approaching the 65.50 level. This suggests overbought conditions may be forming, with a potential pullback expected if the %D line (signal line) fails to cross above 60. The KDJ’s overbought threshold (~80) has not been breached, offering some room for further upside before caution is warranted.

Bollinger Bands

Volatility has expanded significantly since late August, with the 20-period Bollinger Bands widening to ~$1.50. The current price of $65.51 is near the upper band, suggesting short-term overbought conditions. A breakdown below the middle band (~$64.50) would indicate a return to mean-reversion dynamics, with the lower band (~$63.50) as the next critical support. The recent consolidation near the upper band also signals a potential reversal setup if volume fails to sustain the rally.

Volume-Price Relationship

Trading volume has surged during the recent rally, with the September 5 session recording 5.02 million shares traded, a 20% increase from the prior day. This volume validates the strength of the bullish move, as higher participation typically precedes sustainable trends. However, the volume profile shows a slight tapering on September 5, which may hint at waning momentum. A follow-through increase in volume on the next rally above $65.63 would reinforce the bullish case, while a volume contraction could signal a false breakout.

Relative Strength Index (RSI)

The 14-period RSI has climbed to ~68, approaching overbought territory. While not yet above 70, this level suggests the stock is near a short-term peak, particularly if the RSI fails to close above 70 on the next session. A drop below 60 would signal a potential correction, with key support levels at 55 (oversold threshold) and 45. Divergence between the RSI and price action (e.g., RSI peaking before the price) would further validate a near-term reversal.

Fibonacci Retracement

Applying the 23.6%–61.8% Fibonacci retracement levels from the August 19 high ($67.81) to the September 3 low ($61.76), key levels are identified at ~$66.10 (38.2%), ~$65.00 (50%), and ~$63.90 (61.8%). The current price of $65.51 aligns with the 38.2% retracement level, suggesting a potential consolidation zone. A breakdown below $65.00 would target the 61.8% level ($63.90), with a bearish extension at ~$62.45.

Backtest Hypothesis

A backtest strategy could be designed to exploit the confluence of overbought RSI levels and Fibonacci retracement zones. For instance, a short-biased trade might trigger when the RSI crosses above 70 while the price is within the 38.2%–50% Fibonacci range, with a stop-loss placed above the 61.8% level. Historical data from mid-August to mid-September show that such a setup could have captured a ~2.5% profit on a short trade from $67.81 to $65.51, though false breakouts would require tight risk management. A long-biased strategy could target entries near the 61.8% retracement level ($63.90) with a stop below $62.45, leveraging the recent volume surge as a bullish signal.