Charles Schwab (SCHW) Surges 3.02% to $105.08 on Bullish Reversal as Technical Indicators Signal Momentum Shift

The Charles Schwab (SCHW) closed the most recent session with a 3.02% gain, reaching $105.08, indicating a strong bullish reversal. This price action, combined with elevated trading volume and recent volatility patterns, suggests a potential short-term momentum shift. Below is a technical analysis of key indicators to assess the stock’s near-term trajectory.

Candlestick Theory

Recent price action shows a bullish engulfing pattern on February 6, 2026, where the candle closed near its high ($105.08) after a prior session’s bearish candle. This signals strong buying pressure. Key support levels are identified at $101.57 (February 5 low) and $99.91 (December 31 low), while resistance aligns with the recent high of $105.28 (February 3) and the 50-day moving average (~$103.50). A break above $105.28 may target $106.50, but a pullback below $101.57 could trigger a retest of $99.91.

Moving Average Theory

The 50-day MA (~$103.50) and 100-day MA (~$102.00) are currently above the 200-day MA (~$98.00), confirming an uptrend. The 50-day MA crossing above the 200-day MA in late January 2026 (a "golden cross") reinforced bullish sentiment. However, the 200-day MA remains a critical long-term support. If the price dips below $102.00, the 100-day MA could act as a short-term floor.

MACD & KDJ Indicators

The MACD histogram has expanded positively in the last two sessions, suggesting accelerating momentum. The KDJ Stochastic oscillator shows the K line (~85) approaching overbought territory (above 80), with the D line (~75) rising, indicating potential exhaustion. A divergence between K and D may signal a pullback, but the current alignment supports continuation of the uptrend.

Bollinger Bands

Volatility has expanded in recent weeks, with the bands widening from a 2% range to 4.5%. The price closed near the upper band ($105.28), suggesting overbought conditions. A consolidation period within the bands is probable before a potential breakout. If the bands contract (e.g., a 1% range), it may precede a sharp move, either upward or downward.

Volume-Price Relationship

Trading volume on February 6, 2026, spiked to 7.5 million shares, a 20% increase from the prior session, validating the bullish move. However, volume has been inconsistent during the recent rally, with mixed signals on days like February 3 (high volume, bearish close). Sustained volume above 8 million shares per session would strengthen the case for continuation.

Relative Strength Index (RSI)

The 14-day RSI has surged to ~68, nearing overbought territory. While not yet above 70, this level suggests caution. A close above 70 would likely trigger profit-taking, but divergence between RSI and price (e.g., higher highs in price without corresponding RSI highs) could foreshadow a reversal.

Fibonacci Retracement

From the December 2025 low ($97.23) to the January 2026 high ($104.82), key retracement levels at 38.2% ($101.10) and 61.8% ($99.60) have been tested. The recent rally has pushed the price above the 23.6% retracement level ($103.10), suggesting a potential extension to the 127.2% projection ($107.50) if the trend continues.

Confluence and Divergences
Multiple indicators align on the bullish case: the bullish engulfing pattern, golden cross, and MACD expansion all support continuation. However, the RSI approaching overbought levels and KDJ nearing saturation suggest caution. A divergence between the KDJ and price action (e.g., lower highs in KDJ despite higher price) could signal weakening momentum. Additionally, while volume validates the recent rally, inconsistent volume patterns hint at potential distribution.

Probabilistic Outlook

The stock is likely to trade in a $101.50–$106.00 range in the near term, with a 60% probability of testing $105.28 resistance and a 40% chance of a pullback to $101.57 support. A break above $106.00 may extend the uptrend, but a close below $101.00 would raise bearish concerns. Traders should monitor the 200-day MA and Fibonacci levels for dynamic support/resistance shifts.